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ORDERED PUBLISHED

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. ID-11-1060-DJuMk

)

BARRYNGTON EUGENE SEARCY, )

) Bk. No. 09-00248-TLM

Debtor. )

______________________________)

) Adv. No. 09-06082-TLM

BARRYNGTON EUGENE SEARCY, )

)

Appellant, )

)

v. ) O P I N I O N

)

ADA COUNTY PROSECUTING )

ATTORNEY’S OFFICE, )

)

Appellee. )

______________________________)

Submitted without oral argument

 on November 17, 2011

Filed - January 9, 2012

Appeal from the United States Bankruptcy Court

for the District of Idaho

Honorable Terry L. Myers, Chief Bankruptcy Judge, Presiding

 

Appearances: Barryngton Eugene Searcy, appellant pro se, on

brief

Heather M. McCarthy, Deputy Prosecuting Attorney

on brief for Appellee Ada County Prosecuting

Attorney’s Office

 

Before: DUNN, JURY, and MARKELL, Bankruptcy Judges.

FILED

JAN 09 2012

SUSAN M SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT
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 Unless otherwise indicated, all chapter and section 1

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

all “Rule” references are to the Federal Rules of Bankruptcy

Procedure, Rules 1001-9037. 

 We may take judicial notice of the bankruptcy court’s 2

electronic docket and the documents filed therein. See O’Rourke

v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d 955,

957-58 (9th Cir. 1989); Atwood v. Chase Manhattan Mortg. Co. (In

re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).

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DUNN, Bankruptcy Judge:

The appellant Barryngton Eugene Searcy (“Mr. Searcy”)

appeals the bankruptcy court’s Memorandum of Decision

(“Memorandum Decision”) and Order determining that attorney’s

fees and costs in the total amount of $13,172.00, awarded by the

Idaho state District Court and Court of Appeals against Mr.

Searcy and in favor of the appellee Ada County Prosecuting

Attorney’s Office (“Ada County”), are excepted from Mr. Searcy’s

discharge in bankruptcy under 11 U.S.C. §§ 523(a)(7) and (17).1

We AFFIRM.

Factual Background

The essential facts in this appeal are not in dispute. The

following factual narrative is derived from the statement of

facts set forth by the bankruptcy court in the Memorandum

Decision, supplemented from the Excerpts of Record filed by Ada

County and the bankruptcy court’s electronic docket for adversary

proceeding no. 09-06082-TLM.2

Mr. Searcy is a prisoner serving a fixed life sentence in

the custody of the Idaho Department of Corrections. On June 14,
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2006, while incarcerated, Mr. Searcy filed a civil complaint in

the Ada County District Court (“District Court”) against, among

others, Ada County and several of its employees (collectively,

the “Ada County Defendants”). Mr. Searcy’s complaint, as

amended, alleged claims for negligence and intentional infliction

of emotional distress and sought a declaratory judgment that the

Ada County Defendants had violated his rights.

On March 17, 2007, the District Court dismissed two of Mr.

Searcy’s claims pursuant to Idaho R. Civ. P. 12(b)(6) and Idaho

Code § 31-3220A(14), concluding that they were frivolous and

failed to state a claim upon which relief could be granted. On

April 5, 2007, the District Court granted summary judgment in

favor of the Ada County Defendants on Mr. Searcy’s remaining

claims, finding those claims frivolous as well. The Ada County

Defendants requested, and the District Court awarded them,

attorney’s fees under Idaho Code § 31-3220A(16) in the amount of

$7,944.

Mr. Searcy appealed the District Court’s dismissal and

summary judgment orders. In August 2008, the Idaho Court of

Appeals (“Court of Appeals”) affirmed the District Court’s orders

and concluded that the District Court’s award of attorney’s fees

to the Ada County Defendants was proper under Idaho Code § 31-

3220A(16). Moreover, the Court of Appeals also determined that

Mr. Searcy’s appeal was frivolous and met the criteria for an

award of attorney’s fees under both Idaho Code §§ 31-3220A(16)

and 12-121. The Court of Appeals awarded the Ada County

Defendants attorney’s fees of $5,000 and costs of $228, for a

total award of $5,228.
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On February 5, 2009, Mr. Searcy filed a petition for relief

under chapter 7. Mr. Searcy disclosed the two awards of

attorney’s fees and costs in his schedules as claims. Mr. Searcy

received his discharge on May 12, 2009.

On October 8, 2009, Ada County filed an adversary proceeding

complaint (“Complaint”) seeking to except from Mr. Searcy’s

discharge the awards of attorney’s fees and costs by the District

Court and the Court of Appeals in Ada County’s favor under

§§ 523(a)(7) and (17). Mr. Searcy filed an answer to the

Complaint and asserted three counterclaims against Ada County. 

Approximately two weeks before the trial, Mr. Searcy withdrew his

counterclaims.

The Complaint was tried on October 27, 2010. Mr. Searcy

stipulated to the amounts of the District Court’s judgment for

attorney’s fees and the Court of Appeals’ order awarding

attorney’s fees and costs, as well as to the admission as

evidence of the District Court’s judgment and the Court of

Appeals’ order.

After hearing argument, the bankruptcy court took the matter

under advisement. On January 12, 2011, the bankruptcy court

issued its Memorandum Decision concluding that the attorney’s

fees and costs awarded to Ada County by the District Court and

the Court of Appeals against Mr. Searcy were excepted from his

discharge under §§ 523(a)(7) and (17). The bankruptcy court

entered its Order excepting Ada County’s claims against Mr.

Searcy in the amount of $13,172 from discharge on January 24,

2011. Mr. Searcy timely appealed.
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Jurisdiction

The bankruptcy court had jurisdiction under 28 U.S.C.

§§ 1334 and 157(b)(1) and (b)(2)(I). We have jurisdiction under

28 U.S.C. § 158.

Issue

Did the bankruptcy court err in concluding that Ada County’s

claims for attorney’s fees and costs were excepted from Mr.

Searcy’s discharge?

Standard of Review

We review a bankruptcy court’s legal conclusions, including

its interpretation of the Bankruptcy Code and state laws, de

novo. Roberts v. Erhard (In re Roberts), 331 B.R. 876, 880 (9th

Cir. BAP 2005), aff’d, 241 F. App’x 420 (9th Cir. 2007); B-Real,

LLC v. Chaussee (In re Chaussee), 399 B.R. 225, 229 (9th Cir. BAP

2008).

Discussion

A. Exceptions to Discharge Generally and § 523(a)(7) in

Particular

Section 523(a)(7) provides an exception to discharge for a

debt “to the extent such debt is for a fine, penalty, or

forfeiture payable to and for the benefit of a governmental unit,

and is not compensation for actual pecuniary loss, . . . .” 

There are three requirements for a debt to be excepted from

discharge under § 523(a)(7): 1) the debt must be for a fine,

penalty or forfeiture; 2) the debt must be payable to or for the

benefit of a governmental unit; and 3) the debt cannot constitute

compensation for actual pecuniary loss.

While Mr. Searcy does not dispute that Ada County is a
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governmental unit for purposes of the § 523(a)(7) exception to

discharge, he argues that his debt to the county is not a “fine,

penalty or forfeiture,” and he further argues that the awards of

attorney’s fees and costs to Ada County do in fact constitute

“compensation for actual pecuniary loss.” We deal with each of

these arguments in turn.

1. Awards of Attorney’s Fees and Costs under Idaho Code

§ 31-3220A(16) are Penalties

We agree with Mr. Searcy that the statutory exceptions to

discharge generally are to be construed strictly in favor of the

debtor and against those seeking to except debts from the

debtor’s discharge. See, e.g., Snoke v. Riso (In re Riso), 978

F.2d 1151, 1154 (9th Cir. 1992). In interpreting statutes, if

the language is clear on its face, that generally ends the

matter.

The starting point in discerning congressional

intent is the existing statutory text, see Hughes

Aircraft Co. v. Jacobson, 525 U.S. 432, 438 (1999) . .

. . It is well established that “when the statute’s

language is plain, the sole function of the court–at

least where the disposition required by the text is not

absurd–is to enforce it according to its terms.”

Lamie v. United States Trustee, 540 U.S. 526, 534 (2004)

(citations omitted).

However, where statutory language is ambiguous, courts need

to look beyond the specific language of the subject statute to

the context in which that language is used and to relevant

legislative history, if it exists. “[W]hether a statute is

ambiguous is determined by reference to the language itself, the

specific context in which that language is used, and the broader

context of the statute as a whole.” Hough v. Fry (In re Hough),
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239 B.R. 412, 414 (9th Cir. BAP 1999) (quoting Robinson v. Shell

Oil Co., 519 U.S. 337, 341 (1997)).

Interpretation of § 523(a)(7) has a history in chapter 7

cases. In Kelly v. Robinson, 479 U.S. 36 (1986), the Supreme

Court confronted the issue of whether a debtor could discharge a

restitution debt to the Connecticut Office of Adult Probation,

imposed as a condition of probation in her criminal sentence for

wrongful receipt of welfare benefits, in a chapter 7 bankruptcy. 

In Kelly, while reiterating that the “starting point in every

case involving construction of a statute is the language itself”

(quoting Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 756

(1975) (Powell, J., concurring)), the Supreme Court went on to

state, “[b]ut the text is only the starting point.” 479 U.S. at

43. The court went on to cite the specific language of

§ 523(a)(7) but further stated that, “[t]his language is subject

to interpretation.” Id. at 50. The Supreme Court concluded that

§ 523(a)(7) “creates a broad exception for all penal sanctions,

whether they be denominated fines, penalties, or forfeitures.” 

Id. at 51 (emphasis added). The Supreme Court ultimately held in

Kelly that the debtor’s restitution debt, imposed as a condition

of her criminal probation, was not discharged in her chapter 7

case, in spite of the fact that the word “restitution” does not

appear in § 523(a)(7).

In this appeal, the question is whether the § 523(a)(7)

exception to discharge covers awards of attorney’s fees and costs

under Idaho Code § 31-3220A(16). Although the question of

whether a debt is a “fine, penalty or forfeiture” for purposes of

§ 523(a)(7) is a question of federal law, we look to state law to
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determine whether the subject debt is such an obligation. See,

e.g., Hickman v. Texas (In re Hickman), 260 F.3d 400, 405 (5th

Cir. 2001); Colorado v. Jensen (In re Jensen), 395 B.R. 472, 481

(Bankr. D. Colo. 2008).

Idaho Code § 31-3220A(16) provides:

The court shall award reasonable costs and attorney’s

fees to the defendant or respondent if the court finds

that:

(a) Any allegation in the prisoner’s affidavit is

false;

(b) The action or any part of the action is frivolous

or malicious; or

(c) The action or any part of the action is dismissed

for failure to state a claim upon which relief can be

granted.

As noted in the statement of Factual Background above, the

District Court dismissed two of Mr. Searcy’s claims as frivolous

and for failure to state a claim upon which relief could be

granted and granted summary judgment on Mr. Searcy’s remaining

claims, finding them to be frivolous as well. The Court of

Appeals affirmed, finding Mr. Searcy’s appeal to be frivolous. 

Mr. Searcy does not contest those determinations. Accordingly,

the awards of attorney’s fees and costs under Idaho Code § 31-

3220A(16) by the District Court and the Court of Appeals

concerned in this appeal are supported by findings under Idaho

Code § 31-3220A(16)(b) and (c).

By its terms, awards of attorney’s fees and costs against

prisoners under Idaho Code § 31-3220A(16) are mandated based on a

prisoner’s filing a false affidavit, taking frivolous or

malicious actions, or filing unwarranted claims in civil

litigation. The “Statement of Purpose” for Idaho Senate Bill

1394 (“SB 1394"), the legislation adopting Idaho Code § 31-3220A,
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states:

The purpose of this legislation is to place prison and

jail inmates on an equal footing with other civil law

litigants concerning claims against the state and

counties. Under current law, there are no

disincentives for the filing of frivolous claims by

inmates. While preserving the right of inmates to file

meritorious claims, this legislation imposes financial

costs and consequences upon inmates who file frivolous

claims and subject the Idaho taxpayers to literally

millions of dollars in defense costs. (Emphasis

added.)

It is true, as argued by Mr. Searcy and as noted by the

bankruptcy court, that the terms “fine,” “penalty” and

“forfeiture” are not found in Idaho Code § 31-3220A(16). Rather,

the terms used in the statute’s “Statement of Purpose” are

“disincentives,” “financial costs” and “consequences.” The

synonyms for “disincentive” noted in Collins Thesaurus are

“discouragement, deterrent, impediment, damper, dissuasion,

determent.” Collins Thesaurus of the English Language (Harper

Collins Publishers 2d ed. 2002). However, we agree with the

bankruptcy court that use or nonuse of the terms “fine, penalty

or forfeiture” is not dispositive. See Kelly v. Robinson, 479

U.S. at 51; Forney v. Hoseley (In re Hoseley), 96.1 I.B.C.R. 37,

39 (Bankr. D. Idaho 1996).

The language of Idaho Code § 31-3220A(16) and its

legislative history consistently indicate that the primary

purpose of the Idaho statute concerned in this appeal is to deter

prisoners from filing frivolous civil litigation, implemented by

imposing attorney’s fees and costs as a penalty for prisoners’

actions in filing and pursuing such litigation. In other words,

Idaho Code § 31-3220A(16) imposes a “penalty” on prisoners for

filing frivolous lawsuits. See Madison v. Craven, 105 P.3d 705,
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708-09 (Idaho Ct. App. 2005) (“Section 31-3220A requires inmates

to make decisions concerning the merits of their case and

discourages them from filing frivolous lawsuits. Discouraging

frivolous prisoner litigation and assuring prisoner financial

accountability are legitimate concerns of the state and the

classification is based on the state’s goal of reducing frivolous

litigation.”).

We conclude that Idaho Code § 31-3220A(16) imposes a

“penalty” for purposes of our analysis under § 523(a)(7) as a

matter of law, and we agree with the bankruptcy court in so

determining.

2. Awards of Attorney’s Fees and Costs under Idaho Code

§ 31-3220A(16) are not Dischargeable as “Compensation

for Actual Pecuniary Loss”

Mr. Searcy further argues that awards under Idaho Code § 31-

3220A(16) do not qualify for exception from his discharge because

they “serve to compensate ‘the defendant or respondent’ for their

legal expenses incurred during the course of a frivolous civil

litigation. The statute is compensatory, rather than penal, in

both nature and function.” Appellant’s Opening Brief at 7. We

agree with Mr. Searcy that in effect, if Ada County were to

collect any amount of the District Court or Court of Appeals

awards of attorney’s fees and costs against him, it would be

reimbursed for actual expenses. Awards of attorney’s fees and

costs generally are based on actual out-of-pocket costs. Indeed,

a “Fiscal Note” in the legislative history of SB 1394 states,

among other things, that,

Requiring non-indigent prisoners to pay normal filing

fees and costs would increase court revenues. 

Subjecting prisoner assets to execution would increase
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cost recovery by the state and local governments.

However, we disagree with Mr. Searcy that cost reimbursement

is the essence or primary function of § 31-3220A(16), and that

distinction is important.

Returning to the Supreme Court’s decision in Kelly v.

Robinson, the court recognized the differences between the

restitution condition to probation considered in that case and

traditional fines and penalties. “Unlike traditional fines,

restitution is forwarded to the victim, and may be calculated by

reference to the amount of harm the offender has caused.” Kelly

v. Robinson, 479 U.S. at 51-52. However, the Supreme Court

concluded that the compensatory aspect of restitution was

incidental to the primary purposes served by the restitution

remedy in the criminal justice context.

The criminal justice system is not operated primarily

for the benefit of victims, but for the benefit of

society as a whole. Thus, it is concerned not only

with punishing the offender, but also with 

rehabilitating him. Although restitution does resemble

a judgment “for the benefit of” the victim, the context

in which it is imposed undermines that conclusion. The

victim has no control over the amount of restitution

awarded or over the decision to award restitution. 

Moreover, the decision to impose restitution generally

does not turn on the victim’s injury, but on the penal

goals of the State and the situation of the defendant.

Id. at 52. Accordingly, the Supreme Court determined that the

compensatory aspects of the criminal restitution remedy did not

remove it from the § 523(a)(7) exception to discharge. Id. at

53.

The Ninth Circuit has considered this issue in State Bar of

California v. Taggart (In re Taggart), 249 F.3d 987 (9th Cir.

2001), and State Bar of California v. Findley (In re Findley),
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593 F.3d 1048 (9th Cir. 2010).

The Taggart decision turned on the Ninth Circuit’s

interpretation of two statutes under the then-current version of

the California Business and Professions Code (“BPC”). BPC

§ 6086.10 characterized attorney’s fees imposed for reimbursement

of expenses in attorney disciplinary proceedings as “costs.” 

Taggart, 249 F.3d at 992. However, BPC § 6086.13 authorized the

California Supreme Court to award additional “monetary sanctions”

in such proceedings. Id. at 991-92. The Ninth Circuit held that

the structure of the BPC along with its legislative history

indicated that “costs” were not fines or penalties. Id. at 994. 

The Ninth Circuit noted specifically that all indications were

that California did not consider the assessment of costs in the

subject context as penal in nature. Id. Accordingly, the costs

of the chapter 7 debtor’s attorney disciplinary proceeding were

not excepted from his discharge under § 523(a)(7). Id.

In response to the Taggart decision, the California

legislature amended BPC § 6086.10 to add a new subsection (e)

that states:

In addition to other monetary sanctions as may be

ordered by the Supreme Court pursuant to Section

6086.13, costs imposed pursuant to this section are

penalties, payable to and for the benefit of the State

Bar of California, a public corporation created

pursuant to Article VI of the California Constitution,

to promote rehabilitation and to protect the public. 

This subdivision is declaratory of existing law.

When the Taggart analysis was next considered by the Ninth

Circuit in Findley, the court determined that the Taggart

decision had been undermined for several reasons: First, the

addition of subsection (e) to the statute clarified the
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legislative intent “‘to promote rehabilitation and to protect the

public,’ rather than to provide compensation.” In re Findley,

593 F.3d at 1052-53. Second, the distinction between “costs” and

“sanctions” was eliminated by the California legislature’s

designating attorney disciplinary costs as “penalties” imposed

“[i]n addition to other monetary sanctions.” Id. at 1053 (citing

Taggart, 249 F.3d at 991-93). Finally, the draftsman of the

amended version of BPC § 6086.10, stated in a declaration

submitted for the record that:

Section 6086.10(e) was added to the California [BPC] to

expressly clarify and re-state the intent of the

California Legislature that disciplinary costs are

monetary sanctions and are a part of the punishment

imposed on California lawyers for professional

misconduct by making him or her pay for part of the

costs of the proceeding.

593 F.3d at 1053 (emphasis added). The Ninth Circuit recognized

that even as revised, BPC 6086.10 retained provisions indicating

a compensatory purpose. “Section 6086.10 costs continue to

reimburse the State Bar for ‘actual expenses’ and ‘reasonable

costs’ and depend on state expenditures for their imposition.” 

Id. Nevertheless, the Ninth Circuit determined that the

overriding penal and rehabilitative functions of the amended

version of BPC § 6086.10 precluded discharge in bankruptcy of

costs imposed under BPC § 6086.10 pursuant to § 523(a)(7). Id.

at 1054.

Consistent with the Ninth Circuit’s rationale in Findley, a

number of other courts have concluded that even where a debt is

intended to help defray government expenses, including attorney’s

fees, it may not be dischargeable if the primary purpose for its

imposition is penal. See, e.g., United States Dept. of Hous. &
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Urban Dev. v. Cost Control Mktg. & Sales Mgmt. of Va., Inc., 64

F.3d 920, 928 (4th Cir. 1995); Thompson v. Commonwealth of

Virginia (In re Thompson), 16 F.3d 576, 580-81 (4th Cir. 1994);

In re Zarzynski, 771 F.2d 304, 306 (7th Cir. 1985); In re Jensen,

395 B.R. at 487-88.

As noted above, by its terms and consistent with its stated

purpose to discourage the filing of frivolous litigation by Idaho

prison inmates, Idaho Code § 31-3220A(16) imposes a financial

penalty to deter such litigation. We conclude that its primary

purpose is punitive, and any reimbursement of costs and

attorney’s fees to Idaho governmental entities is merely

incidental to its primary purpose. Accordingly, we agree with

the bankruptcy court that “the elements of Idaho Code § 31-

3220A(16) suggestive of compensatory purposes do not override its

penal intent.” We conclude that the bankruptcy court did not err

in determining that Mr. Searcy’s debt to Ada County was excepted

from his discharge under § 523(a)(7).

B. § 523(a)(17)

Mr. Searcy further appeals the bankruptcy court’s

determination that his debt to Ada County was excepted from his

discharge under § 523(a)(17). However, since we have concluded

that it is appropriate to affirm the bankruptcy court’s decision

to except Mr. Searcy’s debt to Ada County from his discharge

based on § 523(a)(7), we do not need to reach the § 523(a)(17)

issues, and we decline to do so.

Conclusion

For the foregoing reasons, we AFFIRM.