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Rebecca Kays was convicted of misdemeanor battery and sentenced to 180 days in jail, suspended to twelve months probation. The trial court ordered as a term of probation that Kays pay restitution in the amount of $1,496. Kays appealed, arguing that the trial court improperly ordered restitution as a term of probation because her only source of income was social security disability benefits. The court of appeals reversed, holding that restitution may not be based on social security income, and therefore, the trial court could not take into account Kays' social security income in determining her ability to pay. The Supreme Court granted transfer, thereby vacating the court of appeals, and reversed the trial court. The Court held that social security benefits may be considered by a trial court in determining a defendant's ability to pay restitution, but the trial court erred in failing to determine Kays' ability to pay restitution and to determine her manner of payment.Receive FREE Daily Opinion Summaries by Email
Mar 20 2012, 11:19 am
of the supreme court,
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ATTORNEY FOR APPELLANT
ATTORNEYS FOR APPELLEE
Cara Schaefer Wieneke
Special Assistant to the State Public Defender
Wieneke Law Office, LLC
Gregory F. Zoeller
Attorney General of Indiana
Stephen R. Creason
Chief Counsel, Attorney General of Indiana
Indiana Supreme Court
REBECCA D. KAYS,
Appellant (Defendant below),
STATE OF INDIANA,
Appellee (Plaintiff below).
Appeal from the Knox Superior Court II, No. 42D02-0912-CM-1504
The Honorable Jim R. Osborne, Judge
On Petition To Transfer from the Indiana Court of Appeals, No. 42A05-1007-CR-504
March 20, 2012
In this case we address the propriety of a trial court’s restitution order against a criminal
defendant whose income is comprised entirely of social security disability benefits.
Facts and Procedural History
Rebecca Kays and her next-door neighbor, Cheryl Wolfe, had a dispute over their
common property line in Knox County. After a surveyor had placed metal posts on the line to
mark it, Wolfe placed PVC pipes over the posts to make them more visible. Kays removed the
pipes and threw them in Wolfe’s yard, striking Wolfe with one of the pipes. Wolfe sustained an
injury to her leg for which she received stitches.
The State charged Kays with Class B
misdemeanor battery, and she was convicted at a bench trial. The trial court sentenced Kays to
180 days in jail, suspended to twelve months probation, and a fine of $10.00. The trial court
further ordered as a term of probation that Kays pay restitution to Wolfe in the amount of
$1,496.15 – which Kays agreed was the amount of Wolfe’s hospital bill related to the injury.
See Tr. at 125. Kays objected, however, to the amount of restitution on the grounds she lacked
the ability to pay it. Kays testified at the sentencing hearing that her sole source of income was
$674.00 per month in social security disability payments, and the ordered restitution “is well
beyond what [Kays] could possibly ever pay.” Tr. at 126. The trial court nonetheless ordered
restitution of $1,496.15 and noted Kays could “stretch that out over a period of time,” but left the
details “to be dealt with between [Kays] and [the department of] probation over this probationary
period.” Tr. at 135-36.
Kays appealed, arguing that the trial court improperly ordered restitution as a term of
probation, because the trial court failed to “inquir[e] into her ability to pay and set[ ] the manner
and time frame within which she must pay.” Br. of Appellant at 1. The Court of Appeals
reversed, holding that the trial court improperly failed to inquire into Kays’ ability to pay and
improperly failed to establish the manner and time of Kays’ payments. The Court of Appeals
remanded the case to the trial court for a hearing regarding Kays’ ability to pay and for a
determination of the manner of payment of any restitution ordered. Kays v. State, 945 N.E.2d
806, 811 (Ind. Ct. App. 2011). The Court of Appeals ordered that on remand, the trial court must
“ignore Kays’ social security income” in its determination of her ability to pay restitution. Id. at
811. Neither party having raised this latter issue the Court of Appeals concluded sua sponte that
a restitution order is an “other legal process” pursuant to 42 U.S.C. § 407(a) which cannot be
applied to social security benefits. See id. at 809-11. The State sought and we granted transfer,
thereby vacating the Court of Appeals opinion. See Indiana Appellate Rule 58(A). We now
reverse the trial court’s decision and remand with instructions.
Standard of Review
The trial court “enjoys wide latitude in fashioning the terms of a defendant’s probation.”
Bailey v. State, 717 N.E.2d 1, 4 (Ind. 1999). We therefore set aside the terms of a probation
order only where the trial court has abused its discretion. Id. An order of restitution lies within
this discretion and will likewise be reversed only for abuse of discretion. See Jaramillo v. State,
803 N.E.2d 243, 250 (Ind. Ct. App. 2004), summarily aff’d in relevant part by 823 N.E.2d 1187,
1188 n.3 (Ind. 2005).
Indiana Code section 35-38-2-2.3 provides in pertinent part, “[w]hen restitution . . . is a
condition of probation, the court shall fix the amount, which may not exceed an amount the
person can or will be able to pay, and shall fix the manner of performance.” Ind. Code § 35-382-2.3(a)(5).
The statute sets forth no particular procedure the trial court must follow in
determining the defendant’s ability to pay, but we have consistently recognized that some form
of inquiry is required. See Pearson v. State, 883 N.E.2d 770, 771 (Ind. 2008) (“When a trial
court orders restitution either as a condition of probation or as a condition of a suspended
sentence, it is required to inquire into the defendant’s ability to pay.”). See also Champlain v.
State, 717 N.E.2d 567, 570 (Ind. 1999) (“In order to impose restitution, the trial court must
consider the defendant’s ability to pay which includes such factors as the defendant’s financial
information, health, and employment history.”); Savage v. State, 650 N.E.2d 1156, 1163 (Ind.
Ct. App. 1995) (Sullivan, J., dissenting in part) (concluding the trial court properly inquired into
a defendant’s ability to pay restitution where the court heard the defendant’s testimony and
reviewed presentence materials which included the defendant’s educational background, work
history, health status, employment status, and financial information), adopted by 655 N.E.2d
1223, 1225 (Ind. 1995). An inquiry into the defendant’s ability to pay is necessary “in order to
prevent indigent defendants from being imprisoned because of their inability to pay.” Ladd v.
State, 710 N.E.2d 188, 192 (Ind. Ct. App. 1999).
The State concedes the trial court’s restitution order does not fix the manner of
performance as required by statute. Br. of Appellee at 5. The State argues, however, that
remand should be required only for this purpose, because the trial court sufficiently inquired into
Kays’ ability to pay. Br. of Appellee at 4. We disagree. Although there is no specific procedure
for determining a defendant’s ability to pay, the record here is at best ambiguous as to whether
the trial court performed the necessary inquiry. It is clear that the trial court knew that Kays did
not work and received social security disability benefits of $674.00 per month. It is also
apparent from the trial court record that Kays had an ownership interest in the house she lived in.
See Tr. at 68. However, the presentence investigation report includes no evidence of Kays’
education, work history, health, assets, or other financial information – nor did the trial court
make any inquiry in this regard. Our decisions envision at least a minimal inquiry into the
defendant’s ability to pay restitution, which is absent here. On this issue we agree with the Court
of Appeals and remand this cause to the trial court for a determination of Kays’ ability to pay
restitution and a determination of her manner of payment.
We disagree, however, with our colleagues’ conclusion that “restitution may not be based
on social security income” and therefore the trial court must “ignore Kays’ social security
income” in determining her ability to pay. Kays, 945 N.E.2d at 811. In reaching this conclusion,
the Court of Appeals interpreted the Social Security Act’s “antiattachment” provision to prohibit
the trial court taking into account the existence of Kay’s social security income in considering
her ability to pay restitution. The statute provides in relevant part:
The right of any person to any future payment under this
subchapter [Assignment of Social Security and Supplemental
Security Benefits] shall not be transferable or assignable, at law or
in equity, and none of the moneys paid or payable or rights
existing under this subchapter shall be subject to execution, levy,
attachment, garnishment, or other legal process . . . .
42 U.S.C. § 407(a).
There is scant case authority on the question of whether social security benefits “can be
taken into account simply to determine an individual’s ability to pay a fine or restitution,” and
the case law that exists “does not appear to yield a clearcut answer” to this question. United
States v. Chorney, No. 11-1310, 2011 WL 6823200, at *3 (1st Cir. Dec. 29, 2011) (per curiam).
Nonetheless, we are of the view that social security benefits may be considered by a trial court in
determining a defendant’s ability to pay restitution.
First, ignoring a defendant’s social security income may paint a distorted picture of her
ability to pay restitution. For example, a debt-free defendant who lives with a family member
and receives room and board at no charge may very well have the ability to pay restitution even
if her only income is from social security. This does not mean that the State could levy against
that income to collect the restitution, but it does reflect an important part of the person’s total
financial picture that a trial court may consider in determining ability to pay.
Further, although not authoritative we find persuasive the decisions of other courts that
have permitted consideration of income or other assets that cannot be levied against in assessing
a defendant’s overall ability to pay fines or restitution. The Seventh Circuit, for example,
recognized that a trial court could take “prospective [social security] benefits into consideration
in determining what [the defendant] reasonably could afford to pay in the way of monthly
restitution payments.” United States v. Lampien, 1 Fed. Appx. 528, 533 n.3 (7th Cir. 2001).
And in examining pension benefits subject to an ERISA anti-alienation provision similar to that
in the Social Security Act, the Fourth Circuit held that a court “cannot mechanically deprive [the
defendant] of his pension benefits” but did not prohibit consideration of those benefits in
“determin[ing] an appropriate amount of restitution.” United States v. Smith, 47 F.3d 681, 684
(4th Cir. 1995). The United States District Court for the Western District of New York found
that the federal statute prohibiting the “attachment, levy, or seizure by or under any legal or
equitable process” of veteran’s benefits did not prohibit the inclusion of those benefits in
calculating a defendant’s income for purposes of assessing the amount of defendant’s required
payment to the Federal Bureau of Prisons. Gleave v. Graham, 954 F. Supp. 599, 611 (W.D.N.Y.
1997) (quoting 38 U.S.C. § 5301(a)(1)).
In similar fashion federal courts have also held that a defendant’s partial interest in his
home is a “‘financial resource’ that the court may properly consider” in imposing a fine, even
though the government could not necessarily “levy upon [the defendant’s] concurrent interest in
the residence or proceeds from its sale.” United States v. Gresham, 964 F.2d 1426, 1430 (4th
Cir. 1992); see also United States v. Lampien, No. 96-3337, 1997 WL 800850, at *2 (7th Cir.
Dec. 31, 1997) (“[A]lthough the court lacks the power to order [the defendant] to rent her home,
it still may consider the income that [the defendant] reasonably could earn through the rental of
her home while incarcerated in deciding what payments she can presently make in restitution.”
(emphasis in original)). In concert with the reasoning of these opinions, we find nothing in 42
U.S.C. § 407(a) to prohibit a trial court from considering a defendant’s social security income
when determining the “amount the person can or will be able to pay” in restitution pursuant to
Indiana Code section 35-38-2-2.3(a)(5).
We remand this cause to the trial court for further proceedings consistent with this
Shepard, C.J., and Dickson, Sullivan and David, JJ., concur.