Could North Carolina make its usual debtor-property exemptions unavailable when a criminal restitution order is enforced as a civil judgment?

Plain-English summary

The North Carolina Courts Commission was considering an addition to G.S. § 1C-1601. That statute identifies property exempt from creditors' claims and lists exceptions. The proposed addition would except criminal restitution orders docketed as civil judgments under G.S. § 15A-1343(d). The Attorney General's office said creating that exception may be constitutionally permissible and stated that it believed proposed House Bill 267 was constitutional.

The opinion quoted Alexander v. Johnson, 742 F.2d 117 (4th Cir. 1984), for the state's latitude to structure a restitution program through reasonable, fairly administered procedures. The quoted passage also warns against chilling an indigent defendant's right to counsel or setting repayment terms that discriminate solely because of poverty.

The opinion cautioned the Commission about James v. Strange, 407 U.S. 128 (1972). The U.S. Supreme Court struck down a Kansas attorney-fee recoupment statute that denied defendants the exemptions available to other civil judgment debtors. The North Carolina opinion said James was the only case it found directly addressing exceptions to exemptions for criminal defendants, and that James concerned attorney fees. It concluded that the decision did not necessarily mean a court would invalidate an exemption exception for restitution.

Currency note

This opinion addresses proposed legislation in 1996. It does not establish whether House Bill 267 became law or what exemptions apply to restitution today. Check the current statutes before acting on its conclusion.

Common questions

What change was the Courts Commission considering?

It wanted to add criminal restitution orders docketed as civil judgments under G.S. § 15A-1343(d) to the claims excepted from the debtor-property exemptions in G.S. § 1C-1601.

Did the opinion guarantee that such an exception would survive a court challenge?

No. It said the exception may be constitutionally permissible and noted the equal-protection concern raised by James v. Strange. The opinion said James did not necessarily invalidate an exception for restitution because that case concerned attorney-fee recoupment.

Why did the opinion discuss Alexander v. Johnson?

It quoted the Fourth Circuit's description of a state's latitude to design an attorney-fee recoupment or restitution program, subject to protections for indigent defendants and reasonable, fairly administered procedures.

Source

• Landing page: https://ncdoj.gov/opinions/exceptions-to-statutory-exemptions-for-execution-of-judgment-on-criminal-restitution-orders/

Citations

• N.C.G.S. § 1C-1601 (judgment-debtor exemptions; exceptions)
• N.C.G.S. § 15A-1343(d) (restitution; civil-judgment enforcement)
• Alexander v. Johnson, 742 F.2d 117 (4th Cir. 1984)
• James v. Strange, 407 U.S. 128 (1972)

Original opinion text

March 21, 1996

Tim Hovis Staff Attorney Legislative Research Division 545 Legislative Office Building 300 North Salisbury Street Raleigh, N.C. 27603-5925

RE: Advisory Opinion; Exceptions to Statutory Exemptions for Execution of Judgment on Criminal Restitution Orders; N.C.G.S. § 1C-1601; 15A-1343(d).

Dear Mr. Hovis:

This is in response to your memorandum of March 6, 1996 requesting an advisory opinion concerning the constitutionality of waiving the statutory exemptions contained in G.S. § 1C-1601, thereby making them inapplicable to the execution of criminal restitution orders enforced as civil judgments. For the reasons which follow, it is our opinion that creating an exception to the exemptions for criminal defendants may be constitutionally permissible.

N.C.G.S. § 1C-1601 designates the property of a debtor that is exempt from claims of creditors (a), subject to waiver (c), and subject to exceptions (e). The excepted claims include claims of the state and federal government; liens of laborers; mechanics liens; other statutory liens; claims for payment of obligations contracted for the purchase of real property; claims for contractual security interests; and claims for child support or alimony. The North Carolina Courts Commission would like to consider adding to this statutory list of exceptions, claims for criminal restitution orders docketed as civil judgments pursuant to N.C.G.S. 15A-1343(d). We have received a copy of House Bill 267, proposed legislation recommended by the Courts Commission which authorizes the enforcement of an order for restitution in a criminal case in the same manner as a civil judgment. Based on a review of state and federal cases, we believe House Bill 267 is constitutional.

Alexander v. Johnson, 742 F.2d 117, 123-124 4th Cir. (1984), reinforces the propriety of a statute such as HB 267, which would allow court-ordered restitution of a criminal defendant to be docketed as a civil judgment. It also provides the strongest rationale for allowing our legislature to structure a restitution program to suit the needs of the state.

North Carolina [is not] barred from structuring a program to collect the amount it is owed from a financially-able defendant through reasonable and fairly administered procedures. The state's initiatives in this area naturally must be narrowly drawn to avoid either chilling the indigent's exercise of the right to counsel, or creating discriminating terms of repayment based solely on the defendant's poverty. Beyond these threshold requirements, however, the State has wide latitude to shape its attorneys fees recoupment or restitution program along the lines it deems most appropriate for achieving lawful state objectives. Id. at 123-124. (emphasis added.)

However, this Commission should be aware of James v. Strange, 407 U.S. 128 (1972), where the United States Supreme Court declared a Kansas recoupment statute unconstitutional, as violative of the equal protection clause, because the defendants were deprived of protective exemptions allowed to other civil judgment debtors. The Court therein indicated

[T]he State's claim to reimbursement may take precedence, under appropriate circumstances, over claims of private creditors. . . This does not mean, however, that a State may impose unduly harsh or discriminatory terms merely because the obligation is to the public treasury rather than to a private creditor. The State itself in the statute before us analogizes the judgment lien against the indigent defendant to other "judgments under the code of civil procedure". But the statute then strips the indigent defendant of the very exemptions designed primarily to benefit debtors of low and marginal incomes. Id. 407 U.S. at 138-139.

This is an issue of first impression in the state of North Carolina. James v. Strange is the only case we have found which directly addresses the issue of exceptions to exemptions as applied to criminal defendants, and that case was limited to the payment of attorneys fees. Therefore, even though James may raise a constitutional issue as to attorneys fees, it does not necessarily mean that a Court would invalidate a statute which grants exceptions to criminal defendants ordered to pay restitution.

We trust that this adequately addresses the issue raised in your request. If we can assist you further, please do not hesitate to contact us.

Andrew A. Vanore, Jr. Chief Deputy Attorney General

Wanda G. Bryant Senior Deputy Attorney General Citizens' Rights Division