                 United States Bankruptcy Appellate Panel
                                   FOR THE EIGHTH CIRCUIT




                                              No. 00-6069 EA


In re:                                                *
                                                      *
Leslie Wilson,                                        *
                                                      *
         Debtor.                                      *
                                                      *
Leslie Wilson,                                        *          Appeal from the United States
                                                      *          Bankruptcy Court for the
         Appellant,                                   *          Eastern District of Arkansas
                                                      *
                   v.                                 *
                                                      *
Cumis Insurance Society, Inc., et al.,                *
                                                      *
         Appellees.                                   *



                                         Submitted: August 10, 2000
                                          Filed: September 11, 2000


Before KOGER, Chief Judge, KRESSEL and SCHERMER, Bankruptcy Judges


SCHERMER, Bankruptcy Judge



         Debtor Leslie Wilson (“Debtor”), appeals the bankruptcy court1 order granting summary judgment
in favor of Defendant John B. Holmes, Jr., the District Attorney for Harris County, Texas, on the Debtor’s

         1
       The Honorable Mary Davies Scott, United States Bankruptcy Judge for the Eastern and
Western Districts of Arkansas.
complaint to determine that her restitution obligation to the Harris County Adult Probation Department
(“Harris County”) is not excepted from discharge pursuant to 11 U.S.C. § 1328(a)(3). We have
jurisdiction over this appeal from the final order of the bankruptcy court. See 28 U.S.C. § 158(b). For
the reasons set forth below, we affirm.

                                                  ISSUE

         The issue on appeal is whether the Debtor’s restitution obligation to Harris County, which arose
after the Debtor pleaded guilty to felony theft and the court deferred a finding of guilt pending conditional
probation, constitutes a debt for restitution included in a sentence on the Debtor’s conviction of a crime
which is excepted from discharge pursuant to 11 U.S.C. § 1328(a)(3). We conclude that the Debtor’s
obligation to Harris County is nondischargeable restitution.

                                            BACKGROUND

         On September 23, 1993, the grand jury of Harris County Texas returned a true bill against the
Debtor, indicting her for the felony offense of theft over $20,000. The indictment alleged that the Debtor
stole $89,549.84 from her employer between October 1988 and April 1991. On July 6, 1995, the Debtor
entered a plea of guilty to the allegation of felony theft in the indictment. On September 14, 1995, the
Texas court conducted a punishment hearing at which the court placed the Debtor on deferred adjudication
probation for ten years and imposed as a condition to probation restitution in the amount of $89,549.84,
payable in an initial installment of $5,000.00, with monthly payments of $730.00 thereafter. The Debtor
failed to make the initial $5,000.00 payment and has only made one full and four partial monthly payments
to Harris County.

        On July 23, 1991, the Debtor filed a joint Chapter 13 petition with her husband in the Eastern
District of Arkansas. She received a discharge on December 4, 1996, and the case was closed on
December 10, 1996. The Debtor never listed or scheduled any obligation to Harris County in her Chapter
13 bankruptcy case.

        On March 9, 1998, the Debtor was arrested for failing to make the restitution payments to Harris
County. The Debtor reopened her 1991 Chapter 13 case and filed her complaint to determine the
dischargeability of the restitution obligation. The bankruptcy court determined that the Debtor’s obligation

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to Harris County is restitution and entered summary judgment on Harris County’s motion. The Debtor
appealed the entry of summary judgment.

                                       STANDARD OF REVIEW

        We review the bankruptcy court’s grant of summary judgment de novo. Clark v. Kellogg Co., 205
F.3d 1079, 1082 (8th Cir. 2000); First Bank of Marietta v. Hogge, 161 F.3d 506, 510 (8th Cir. 1998).
Summary judgment in favor of the defendant is appropriate where there is no genuine issue of material fact
and the defendant is entitled to judgment as a matter of law. Clark, 205 F. 3d at 1082; Hogge, 161 F. 3d
at 510.

                                              DISCUSSION

        Pursuant to Section 1328(a) of the Bankruptcy Code, upon completion of all plan payments, the
Court shall grant a Chapter 13 debtor a discharge of all debts provided for by the plan or disallowed under
Section 502 of the Bankruptcy Code2 except, inter alia, any debt for restitution, or a criminal fine, included
in a sentence on the debtor’s conviction of a crime. 11 U.S.C. § 1328(a)(3).

         The parties do not dispute that the Debtor’s obligation to Harris County constitutes restitution as
that term is commonly used to describe the act of restoring something to its rightful owner. The Debtor
disagrees, however, that his obligation to Harris County is restitution in the legal sense as required by
Section 1328(a)(3) of the Bankruptcy Code. The Debtor contends that the Debtor was never convicted
of a crime and therefore the restitution does not fall within the ambit of Section 1328(a)(3) which is limited
to “restitution . . . included in a sentence on the debtor’s conviction of a crime.” The Debtor argues that
her deferred adjudication probation was not a conviction. While on deferred adjudication probation, the
Texas court defers a finding of guilt on the part of the criminal defendant. Without a finding of guilt, the
criminal defendant has not been convicted of a crime. Therefore, any payments required as part of the
deferred adjudication probation, which may be restitution, are not obligations included on a conviction.




        2
         Section 502 of the Bankruptcy Code governs the allowance and disallowance of claims
against a bankruptcy estate. 11 U.S.C. § 502.

                                                      3
        In connection with her argument, the Debtor cites Rashid v. Powel (In re Rashid), 210 F.3d 201
(3d Cir. 2000), and Pennsylvania Dep’t Pub. Welfare v. Davenport, 495 U.S. 552 (1990); however
neither case cited discusses Section 1328(a)(3) nor supports the Debtor’s argument. Rashid v. Powel (In
re Rashid), 210 F.3d 201 (3d Cir. 2000) interprets Section 523(a)(7) of Bankruptcy Code, not Section
1328(a)(3), and is therefore not applicable herein. Pennsylvania Dep’t Pub. Welfare v. Davenport, 495
U.S. 552 (1990), was decided before the enactment of Section 1328(a)(3) of the Bankruptcy Code.3 In
Davenport, the Supreme Court held that a restitution obligation was a debt which was dischargeable under
Chapter 13. Congress added Section 1328(a)(3) to the Bankruptcy Code in direct response to the
Davenport decision to avoid the result reached therein. Johnson v. Home State Bank, 501 U.S. 78, 83
n.4 (1991).4 Therefore, neither of the authorities relied upon by the Debtor answer the question with which
we are faced.

        Instead, in order to determine whether the Debtor’s restitution obligation to Harris County is
excepted from discharge, the term“conviction” must be defined in the context of Section 1328(a)(3). The
Debtor argues that deferred adjudication probation is not considered a conviction in Texas and that the
Texas definition is controlling. We disagree with the Debtor.

         We have found no court which has addressed the issue of what the term “conviction” means in the
context of Section 1328(a)(3). Instructive, however, is the case of Dickerson v. New Banner Institute,
Inc., 460 U.S. 103 (1983), in which the United States Supreme Court addressed the issue of whether a
state law guilty plea coupled with probation constitutes a conviction in the context of a federal firearms
statute. In Dickerson, the Supreme Court noted the absence of the usual entry of a formal judgment upon
a jury verdict or upon a court’s specific finding of guilt after a bench trial; however, the Court specifically
found the presence of the criminal charge, the plea of guilty to the charge, and the court’s imposition of
probation upon the criminal defendant. 460 U.S. at 111. The Court pointed out that a “plea of guilty
differs in purpose and effect from a mere admission or an extrajudicial confession; it is itself a conviction.
Like a verdict of a jury it is conclusive. More is not required; the court has nothing to do but give judgment


        3
         Subsection (a)(3) of Section 1328 was added in 1990 and only applies to cases commenced
after November 15, 1990. See Criminal Victims Protection Act of 1990, Pub. L. No. 101-581, 104
Stat. 2865, 2865-66 (codified in scattered sections of 11 U.S.C.).
        4
        See H.R. Rep. No. 101-681(I), at 165 (1990), reprinted in 1990 U.S.C.C.A.N. 6472, 6571,
and S. Rep. No. 101-434, at 8 (1990), reprinted in 1990 U.S.C.C.A.N. 4065, 4071.

                                                      4
and sentence.” 460 U.S. at 112-13(quoting Kercheval v. United States, 274 U.S. 220, 223 (1927)). The
Court noted that “one cannot be placed on probation if the court does not deem him to be guilty of a
crime.” 460 U.S. at 113-14. The Court equated a plea of guilty and its notation by the state court,
followed by a sentence of probation, to a conviction for purposes of the federal gun control laws. 460
U.S. at 114.

        Also instructive is the decision of the Fifth Circuit Court of Appeals in United States v. Cisneros,
112 F.2d 1272 (5th Cir. 1997), wherein the court concluded that a deferred adjudication probation under
Texas law constituted a conviction for purposes of the mandatory sentence enhancement provisions of 21
U.S.C. § 841. In Cisneros, the court noted that under Texas law, in order to impose deferred adjudication
probation upon a criminal defendant who has plead guilty, the criminal court must first find that the evidence
substantiated the defendant’s guilt. 112 F. 2d at 1282. Relying on the Supreme Court’s reasoning in the
Dickerson case, the Fifth Circuit Court of Appeals concluded that the deferred adjudication probation after
the guilty plea was a prior conviction for purposes of the federal mandatory sentence enhancement statute.
Id.

        The Eighth Circuit Court of Appeals approved and followed the reasoning of the Supreme Court
in the Dickerson case and that of the Fifth Circuit Court of Appeals in the Cisneros case in determining that
federal law and not state law controls the determination of whether a person has been convicted for
purposes of federal firearms statutes. U.S. v. Ortega, 150 F.3d 937, 948 (8th Cir. 1998)(citing Dickerson
v. New Banner Institute, Inc., 460 U.S. 103, 119 (1983) and United States v. Cisneros, 112 F.2d 1272,
1280-81 (5th Cir. 1997)).5 The Eighth Circuit Court of Appeals concluded that a criminal defendant’s
guilty plea, followed by supervised probation and a suspended imposition of sentence, qualified as a prior
conviction for purposes of the federal sentence enhancement provision of 21 U.S.C. § 841(b). Ortega,
150 F.3d at 948.

        We believe the issue in the present case is analogous to the issues addressed by the
Supreme Court in the Dickerson decision, by the Fifth Circuit Court of Appeals in the Cisneros decision,
and by the Eighth Circuit Court of Appeals in the Ortega decision. Furthermore, the Cisneros decision


        5
        See also U.S. v. Millender, 811 F.2d 476, 477 (8th Cir. 1997), and U.S. v. Woods, 696
F.2d 566, 568-70 (8th Cir. 1982), for the proposition that federal law controls whether a person has
been convicted for purposes of federal firearms statutes.

                                                      5
addressed the Texas deferred adjudication procedure which is at issue here. Accordingly, we follow the
Supreme Court’s reasoning in Dickerson and conclude that the term “conviction” as used Section
1328(a)(3) of the Bankruptcy Code includes a plea of guilty followed by a sentence of probation, despite
the absence of the formal entry of a conviction by the criminal court.

          This result is consistent with the interpretation of other provisions of the Bankruptcy Code where
a state label is not controlling. The question of what constitutes a conviction for purposes of Section
1328(a)(3) of the Bankruptcy Code is analogous to the questions of when a tax is assessed for purposes
of determining its priority status under the Bankruptcy Code6 and whether an obligation arising out of the
dissolution of a marriage is a nondischargeable support obligation or a dischargeable property settlement
obligation under the Bankruptcy Code.7 In each instance, federal law controls the categorization of the
obligation under the Bankruptcy Code, priority versus non-priority or dischargeable versus
nondischargeable, regardless of any labels affixed under state law. With marital obligations, the crucial
issue is the function the award was intended to serve. With taxes, the crucial issue is when the
determination of tax liability is final and the taxing authority has the right to collect the outstanding tax
liability. With a criminal conviction, the crucial issue is whether the criminal court implicitly found the
defendant guilty of the crime before the imposition of restitution obligation.

                                             CONCLUSION

        The bankruptcy court properly concluded that the Debtor’s restitution obligation to Harris County,
which arose after the Debtor pleaded guilty to felony theft and in connection with a deferred adjudication
probation, constitutes a debt for restitution included in a sentence on the Debtor’s conviction of a crime
whichis excepted from discharge pursuant to 11 U.S.C. § 1328(a)(3). Accordingly the bankruptcy court’s
order is affirmed.




        6
         See, e.g., O’Connell v. Minnesota Dep’t of Revenue, 246 B.R. 332 (B.A.P. 8th Cir. 2000).
        7
         See, e.g., Williams v. Williams (In re Williams), 703 F.2d 1055, 1056-57 (8th Cir. 1983).

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A true copy.

       Attest:

                 CLERK, U.S. BANKRUPTCY APPELLATE PANEL FOR THE
                 EIGHTH CIRCUIT




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