United States of America v. DeFazio
Filing
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ORDER granting #9 Plaintiff's Motion for Summary Judgment; denying #11 Defendant's Motion for Oral Argument. The Clerk is directed to enter judgment against Defendant for $254,516.43 in principal and $21,923.00 in interest through January 21, 2011, plus interest from January 22, 2012 through the date of judgment in the amount of $3,967.60, plus interest from the date of judgment at.21% compounded annually until the judgment is satisfied. Plaintiff is also entitled to costs incurred herein. Signed by Judge David G Campbell on 5/31/12.(DMT)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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United States of America,
Plaintiff,
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ORDER
v.
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No. CV11-0529-PHX-DGC
Robert A. DeFazio,
Defendant.
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In this action, the government seeks to collect more than $200,000 in loans made
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by the Department of Education. The government filed a motion for summary judgment
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on January 17, 2012, pursuant to Rule 56 of the Federal Rules of Civil Procedure.
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Doc. 9. Defendant Robert A. DeFazio filed a motion requesting oral argument on the
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government’s motion. Doc. 11. The Court entered an order explaining to Defendant the
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requirements of Rule 56 and the relevant Local Rules of Civil Procedure, and ordered
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Defendant to file a response to the government’s motion for summary judgment by May
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11, 2012. Doc. 12. Defendant has not responded. For the reasons that follow, the Court
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will grant summary judgment in favor of the government.1
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I.
Legal Standard.
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A party seeking summary judgment “bears the initial responsibility of informing
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the district court of the basis for its motion, and identifying those portions of [the record]
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Defendant’s request for oral argument (Doc. 11) is denied because the issues
have been fully briefed and oral argument will not aid the Court’s decision. See Fed. R.
Civ. P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998).
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which it believes demonstrate the absence of a genuine issue of material fact.” Celotex
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Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is appropriate if the
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evidence, viewed in the light most favorable to the nonmoving party, shows “that there is
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no genuine issue as to any material fact and that the movant is entitled to judgment as a
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matter of law.” Fed. R. Civ. P. 56(c)(2). Summary judgment is also appropriate against a
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party who “fails to make a showing sufficient to establish the existence of an element
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essential to that party’s case, and on which that party will bear the burden of proof at
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trial.” Celotex, 477 U.S. at 322. Only disputes over facts that might affect the outcome
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of the suit will preclude the entry of summary judgment, and the disputed evidence must
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be “such that a reasonable jury could return a verdict for the nonmoving party.”
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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
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II.
Preliminary Issue.
The government filed its complaint on March 22, 2011. Doc. 1. The summons
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and complaint were returned to the Court unexecuted on June 10, 2011.
Doc. 7.
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Defendant filed an answer on May 31, 2011. Doc. 6. In his answer, Defendant denied
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receiving formal service, but acknowledged that he was aware of the complaint and stated
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that he would return a request for waiver of service. Doc. 9, at 3 (citing Doc. 6, at 1).
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This history of the case raises a question about whether the Court may assert personal
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jurisdiction over Defendant.
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A defendant waives the defenses of insufficiency of service of process and lack of
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personal jurisdiction by filing an answer without first raising the defenses. Fed. R. Civ.
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P. 12(h); Jackson v. Hayakawa, 682 F.2d 1344, 1347 (9th Cir. 1982); Hays v. United
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Fireworks Mfg. Co., 420 F.2d 836, 844 (9th Cir. 1969). Defendant waived any issue of
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personal jurisdiction by appearing voluntarily and filing an answer.
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III.
Discussion.
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Under LRCiv 7.2(i) of the Local Rules of Civil Procedure, if the opposing party to
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a motion “does not serve and file the required answering memoranda . . . such non-
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compliance may be deemed a consent to the denial or granting of the motion and the
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Court may dispose of the motion summarily.” LRCiv 7.2(i). The Ninth Circuit has held
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that it is an abuse of discretion to grant a motion pursuant to such a local rule where the
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movant’s papers are insufficient to support the motion or on their face reveal a genuine
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issue of material fact. Henry v. Gill Indus., Inc., 983 F.2d 943, 950 (9th Cir. 1993).
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To recover on a promissory note, the government must establish that: (1) the
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defendant signed the note, (2) the government is the current owner or holder of the note,
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and (3) the note is in default. United States v. Petroff-Kline, 557 F.3d 285, 290 (6th Cir.
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2009); United States v. Lawrence, 276 F.3d 193, 197 (5th Cir. 2001). To make this prima
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facie showing, “the government may introduce evidence of the note and a sworn
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transcript of the account or certificate of indebtedness.” Petroff-Kline, 557 F.3d at 290.
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Once a prima facie case is established, the defendant has the burden of proving the
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nonexistence, extinguishment, or variance in payment of the obligation. Id.
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The government contends that it is entitled judgment “in the sum of $276,439.43
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consisting of $254,516.43 principal, plus $21,923 interest computed through January 21,
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2011, with interest continuing to accrue from January 21, 2011, plus interest from the
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date of judgment as provided by law and all costs in this action.” Doc. 9, at 5. To
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support its motion for summary judgment, the government has submitted the relevant
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loan applications and promissory notes (Doc. 10-2, at 2-7 (Ex. 1)), and a Certificate of
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Indebtedness, certified pursuant to 28 U.S.C. § 1746(2) under penalty of perjury
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(Doc. 10-2, at 9 (Ex. 2)).
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The government’s evidence establishes that on or about May 15, 2003 and
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September 1, 2004, Defendant executed promissory notes to secure direct consolidation
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loans from the Department of Education. Doc. 10-2, at 2. Under the promissory notes,
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Defendant “promise[d] to pay to the U.S. Department of Education . . . all sums disbursed
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under the terms of this Promissory Note,” including interest and fees as well as collection
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of costs if Defendant failed to make payment on the note when due. See id. On
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October 8, 2004, the loan was disbursed in the amounts of $104,702.95 and $120,778.63,
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at 4.38 percent interest per annum. Doc. 10-2, at 9. On or about September 3, 2009,
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Defendant defaulted on his loan obligation. Doc. 10, at 2, ¶ 9. Pursuant to 34 C.F.R.
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§ 685.202(b), a total of $29,072.14 in unpaid interest was capitalized and added to the
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principal balance. Id. The Department of Education has credited a total of $87.29 in
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payments from all sources, including Treasury Department offsets.
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After application of these payments, Defendant owes the United States a total debt of
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$276,439.43 as of January 21, 2011, consisting of $254,516.43 in principal and $21,923
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in interest, with interest accruing on the principal at a rate of $30.52 per day. Id.
Doc. 10-2, at 9.
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The government has shown that Defendant signed the promissory note, that the
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government currently holds the note, and that the note is in default. There is sufficient
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evidence for the government to recover on the note.
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IV.
Conclusion.
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The time to respond to the government’s motion for summary judgment has
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expired, and Defendant has not filed a response. Review of the record indicates that the
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government’s motion is facially meritorious and demonstrates the absence of genuine
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issues of material fact. The motion is thus well taken and supports summary judgment
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pursuant to LRCiv 7.2(i).
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IT IS ORDERED:
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1.
Plaintiff’s motion for summary judgment (Doc. 9) is granted.
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2.
Defendant’s request for oral argument (Doc. 11) is denied.
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3.
The Clerk is directed to enter judgment against Defendant for $254,516.43
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in principal and $21,923.00 in interest through January 21, 2011, plus interest from
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January 22, 2012 through the date of judgment in the amount of $3,967.60, plus interest
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from the date of judgment at .21% compounded annually until the judgment is satisfied.
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Plaintiff is also entitled to costs incurred herein.
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Dated this 31st day of May, 2012.
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