Source: http://openjurist.org/249/f3d/987/in-re-timothy-taggart
Timestamp: 2013-12-08 22:34:32
Document Index: 594738985

Matched Legal Cases: ['art\n249', 'art 249', '§ 523', '§ 523', '§ 6086', '§ 6140', '§ 523', '§ 523', '§ 523', '§ 523', '§ 523', '§ 6086', '§ 6086', '§ 523']

249 F3d 987 In Re: Timothy Taggart | OpenJurist
249 F. 3d 987 - In Re: Timothy Taggart	Home249 f3d 987 in re: timothy taggart
249 F3d 987 In Re: Timothy Taggart 249 F.3d 987 (9th Cir. 2001)
IN RE: TIMOTHY L. TAGGART, DEBTOR.THE STATE BAR OF CALIFORNIA, APPELLEE,v.TIMOTHY L. TAGGART, APPELLANT.
No. 99-56343
Submitted November 1, 2000*Filed May 10, 2001
Timothy L. Taggart, Bloomington, California, pro se, for the appellant.
Marie M. Moffat, Lawrence C. Yee, Patricia D. Scotlan, and Robert M. Sweet, San Francisco, California, for the appellee.
Appeal from the United States Bankruptcy Appellate Panel of the Ninth Circuit Christopher M. Klein, Elizabeth L. Perris, and Terry L. Myers, Bankruptcy Judges, Presiding BAP Nos. CC-98-1716 KMyP RS-98-1277 MJ
The bankruptcy code excludes from discharge debt that 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." 11 U.S.C. §§ 523(a)(7). In this case, we must decide whether the costs of attorney disciplinary proceedings brought by the State Bar of California (State Bar) are dischargeable in Chapter 7 bankruptcy, or instead are excluded from discharge by §§ 523(a)(7). Because we conclude that, in California, such costs are compensation to the State Bar for "actual pecuniary loss" rather than "fine[s], penalt[ies], or forfeiture[s]," we reverse the decision of the Bankruptcy Appellate Panel and remand with instruction to discharge the appellant's debt to the State Bar.
Timothy Taggart is an attorney admitted to the Bar in California. As a result of disciplinary proceedings before the California State Bar Court (Bar Court), the California Supreme Court issued two orders which, among other things, temporarily suspended Taggart from the practice of law and placed him on probation for two years.1 California law requires the California Supreme Court to order disciplined attorneys to pay the costs of their disciplinary proceedings. Cal. Bus. & Prof. Code §§ 6086.10. The court awarded costs to the State Bar, and, pursuant to Cal. Bus. & Prof. Code §§ 6140.7, ordered Taggart to pay the costs as part of his bar membership fees for the next year. The costs amounted to $6,894.00. Shortly after the court issued its orders, Taggart filed for bankruptcy protection under Chapter 7, scheduling the State Bar as holding an unsecured claim in the amount of $10,000 for restitution and court costs. After Taggart received his discharge, the State Bar filed an adversary proceeding in the bankruptcy court, alleging that the order to pay costs was nondischargeable under §§ 523(a)(7). The State Bar filed a motion for summary judgment. The bankruptcy court granted the motion after a hearing, based on its conclusion that the State Bar is a governmental agency or entity and that the costs imposed in a disciplinary procedure constitute a penalty or fine. Taggart appealed to the Bankruptcy Appellate Panel (BAP). The BAP affirmed, agreeing with the bankruptcy court that the State Bar is a governmental agency and that the award of costs was a fine or penalty for §§ 523(a)(7) purposes. Taggart now appeals the decision of the BAP.2
"Because we are in as good a position as the BAP to review bankruptcy court rulings, we independently examine the bankruptcy court's decision, reviewing the bankruptcy court's interpretation of the Bankruptcy Code de novo and its factual findings for clear error." United States v. Hatton (In re Hatton), 220 F.3d 1057, 1059 (9th Cir. 2000). In reviewing the bankruptcy court's grant of summary judgment, we must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the bankruptcy court correctly applied the substantive law. Parker v. Cmty. First Bank (In re Bakersfield Westar Ambulance, Inc.), 123 F.3d 1243, 1245 (9th Cir. 1997). No questions of fact are at issue in this appeal; the parties disagree only about whether the bankruptcy court correctly interpreted §§ 523(a)(7). Thus, our review is entirely de novo.
A debt is exempted from discharge under §§ 523(a)(7) "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." 11 U.S.C. §§ 523(a)(7). Taggart does not dispute that his debt for the costs of his disciplinary proceedings are payable to and for the benefit of the State Bar, a governmental unit. Instead, he argues that because the California Supreme Court ordered him to pay costs under Cal. Bus. & Prof. Code §§ 6086.10 rather than to pay a monetary sanction under Cal. Bus. & Prof. Code §§ 6086.13, his debt is compensation for the State Bar's expenses rather than a fine or penalty. As such, he concludes, his debt is not exempt from discharge under §§ 523(a)(7). We agree.
Two different sections of the California Business and Professional Code allow for the imposition of fees on disciplined attorneys. Section 60