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Fearing a flood of criminal defendants will dodge paying restitution to their victims, state attorneys are appealing a federal bankruptcy judge's decision that absolved an arsonist of nearly $240,000 in debt.
It is the first time a Utah judge has ruled that court-ordered criminal restitution can be erased in bankruptcy court.
The March federal ruling had a ripple effect this week when a West Valley City judge relied on it to dismiss $80,000 in restitution ordered for Rebecca Mecham, a 27-year-old Kearns woman injured by a drunken driver.
State attorneys believe both decisions are wrong. They have asked U.S. Bankruptcy Court Judge Glen Clark to stay his March 8 ruling - which would prevent other defendants from using it while the case is appealed.
A hearing on the request is set for May 17 before Clark.
The ruling could hurt other crime victims and affect state agencies involved with restitution orders, said Assistant Attorney General Kevin Olsen, who represents the state Office of Debt Collections.
"The decision has some implications that are real troublesome," Olsen said.
Clark's ruling was made in the bankruptcy of Jason Derek Troff, 27, who was part of a foursome who burned down a West Jordan McDonald's restaurant under construction in August 1996. Protesting the slaughter of cattle, chickens and fish, the group poured gasoline in the nearly completed building and ignited it by throwing a Molotov cocktail.
Troff pleaded guilty to one count of arson in 1997. Third District Judge Tyrone Medley ordered him to spend one year in jail, perform 500 hours of community service, spend 36 months on probation -and pay $239,969 in restitution.
By October 2001, Troff had completed his probation except for paying the debt. Probation officials asked to end his supervision and have the remaining amount - $230,420 - be covered by a civil judgment to be collected by the Office of State Debt Collection.
Judge William Barrett agreed. But in February 2003, Troff filed for Chapter 7 bankruptcy and argued that erased the restitution debt.
State attorneys fought back, arguing Troff should pay what he owed plus more than $50,000 in fees and interest.
Clark analyzed the debt as if it had remained a criminal restitution order.
He cited a 1999 federal appellate ruling that said restitution is only protected against a bankruptcy filing if it is both paid to the government and benefits the government.
Clark reasoned criminal restitution cannot be collected from Troff because it would benefit his crime victims - not the government.
Olsen concedes restitution restores victims' losses, but argues it also "has a purpose to punish and rehabilitate the defendant," which amounts to a benefit for the government.
Chapter 13 bankruptcy trustee and attorney Kevin Anderson notes that other areas of bankruptcy law provide an exception for drunken driving cases.
"The code clearly contemplates that claims arising from death or personal injury caused from a drunk driving action were intended to be [paid]," Anderson said.
That policy is strengthened in the new federal bankruptcy laws signed this week, which extend the protection of restitution ordered for victims of drunken boat and airplane drivers, he said.