Conville v. Department of Education

Filing 22

MEMORANDUM OPINION AND ORDER. Signed by Honorable Robert T. Dawson on June 22, 2012. (lw)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FORT SMITH DIVISION
MICHAEL J. CONVILLE,

PLAINTIFF

v.

CASE No. 11-2246

SECRETARY ARNE DUNCAN
U.S. DEPARTMENT OF EDUCATION

DEFENDANT

MEMORANDUM OPINION AND ORDER
Plaintiff Michael J. Conville seeks judicial review of an
administrative
(“the

decision

Department”),

guaranteed
Plaintiff’s
Defendant’s

student

made

and

the

loans.

Motion

by

for

the

discharge

Currently
Summary

Response/Cross

Department

Motion

of

before

his
the

Judgment
for

of

federally
Court

(Doc.

Summary

Education

are

16)

and

Judgment

(Doc.

18), Memorandum in Support (Doc. 19) and Statement of Undisputed
Facts

(Doc.

20).

For

the

reasons

set

out

below

Plaintiff’s

Motion for Summary Judgment (Doc. 16) is DENIED and Defendant’s
Motion for Summary Judgment (Doc. 18) is GRANTED.

Accordingly,

Plaintiff’s Complaint (Doc. 2) is DISMISSED WITH PREJUDICE.
I.

Background
Between 1976 and 1978, Plaintiff obtained five federally

guaranteed loans in the amount of $22,500.00 to attend Catholic
University of America.

(Admin. Rec. P. 23).

Upon completion of

his course of study, Plaintiff was unable to find a job or to
repay his student loan debt.

(Doc. 2).

Page 1 of 12

On September 9, 1983, Plaintiff applied to UNIPAC1, the
servicer of his loans, for forbearance from September 1, 1983,
through February 1, 1984.

He asserted that he was looking for

work in his field but was currently unable to meet his monthly
payments due to low income caused by temporary unemployment.
The request was approved on September 12, 1983. (Admin. Rec. P.
5).
On

March

28,

1984,

Plaintiff

applied

to

UNIPAC

for

forbearance from March 1, 1984 through June 1, 1984, citing his
inability to meet his monthly payment.

The request was approved

on April 2, 1984. (Doc. 2, Ex. E).
On June 26, 1984, Plaintiff wrote to UNIPAC that he would
be unable to begin repaying his loan on July 1, 1984.

He stated

that his income was still at a level which made it impossible to
begin repayment.
it

appears

status.

that

“Unless some other arrangements can be made,
my

only

recourse

will

be

to

enter

default

If you have any suggestions, please contact me.”

2, Ex. F).

(Doc.

On July 2, 1984, UNIPAC informed Plaintiff that it

was unable to offer any further assistance on his account in
addition to the previous ten months of forbearance.

(Doc. 2,

Ex. G.).

1

  UNIPAC loan Service Corporation was founded in 1978 and renamed

Nelnet in 1996.
Nelnet Investors, http://www.nelnetinvestors.com/faq.cfm
visited May 14, 2012).
Page 2 of 12

(last

On

September

7,

1984,

Plaintiff

applied

to

UNIPAC

for

forbearance for the period of July 1, 1984, through December 1,
1984, explaining that given his monthly budget, he was unable to
meet his monthly payment at that time. (Doc. 2, Ex. I).

By

letter dated September 26, 1984, UNIPAC informed Plaintiff that
his request for forbearance was denied and that he would receive
no further extensions on his loan.
deemed “delinquent.”

At this time the loans were

(Doc. 2, Ex. J).

On October 3, 1984, UNIPAC notified Plaintiff that it was
accelerating his loans.

UNIPAC demanded payment of the entire

amount of the notes plus interest ($22,707.86) within thirty
days.

(Admin. Rec. P. 20). After receiving no payment, UNIPAC

declared

the

loans

in

default

as

of

November

1,

1984,

and

applied to the Federal Insured Student Loan Program for payment
of the insurance claim.

(Doc. 2, Ex. K).

On March 21, 1985, Plaintiff wrote to the Department of
Education,

encouraging

it

to

“please

feel

free

to

make

any

suggestions which outline a repayment plan that is compatible
with my unemployed status.”
The

next

entry

in

(Doc. 2, Ex. N).
the

administrative

record

is

the

Department’s response to Plaintiff’s request for review of his
account,

dated

January

13,

2004.

In

its

response,

the

Department advised Plaintiff that the amount needed to satisfy
the outstanding balance on his account was $59,770.95, including
Page 3 of 12

principal, interest, fees and collection costs.

The Department

advised Plaintiff that it could not cancel or reduce his loans
and

that

agency.
On

his

account

had

been

turned

over

to

a

collection

(Doc. 2, Ex. O).
February

19,

2004,

the

Department

responded

to

Plaintiff’s dispute of the interest and fees that had been added
to his account, explaining that they were authorized by statute.
The

Department

noted,

“Your

financial

situation

makes

it

difficult for you to repay this debt” and referred Plaintiff to
the collection agency for additional information.

(Doc. 2, Ex.

P).
In

April,

2006,

Plaintiff

record from the Department.

requested

his

administrative

(Admin. Rec. P. 6).

In June, 2008,

Plaintiff received a “Notice of Proposed Treasury Offset2.”

On

August 21, 2008, Plaintiff wrote to the Department alleging that
its decision to declare his loans in default was not consistent

2

  The

Treasury Offset Program is a centralized offset program,
administered by the Financial Management Service's (FMS) Debt
Management Services (DMS), to collect delinquent debts owed to
federal agencies and states, in accordance with 26 U.S.C.
§ 6402(d) (collection of debts owed to federal agencies), 31
U.S.C. § 3720A (reduction of tax refund by amount of the debts),
and other applicable laws. FMS disburses federal payments, such
as federal tax refunds, for agencies making federal payments
(known as "payment agencies"), such as the Internal Revenue
Service. "Creditor agencies," such as the Department of
Education, submit delinquent debts to FMS for collection and
inclusion in TOP and certify that such debts qualify for
collection
by
offset.
Federal
Management
Service,
http://www.fms.treas.gov/debt (last visited May 15, 2012).
Page 4 of 12

with the regulations of the Secretary of Education and that he
was never given “notice about an income contingent repayment
plan.”

Plaintiff concluded with the demand that the Department

recall and discharge his outstanding loans.

(Admin. Rec. P.

12).
On September 26, 2008, the Department wrote to Plaintiff in
response to his request for a hearing on his objections3 to the
offset of his tax returns.

(Admin. Rec. P. 1).

Elria Whitty,

Hearing Official, informed Plaintiff that she had reviewed the
documents

provided

Department’s

by

him

electronic

and

records

the

information

regarding

his

in

the

account

and

determined that the evidence was insufficient to show that the
debt was not owed; that UNIPAC was required to offer him an
additional

forbearance

or

that

his

account

was

improperly

serviced by the loan holder.
On June 28, 2011, Plaintiff filed his Complaint pro se and
in

forma

U.S.C.

§

decision

pauperis
702,
by

under

requesting

the

the

Administrative

review

Department

of

of

the

Education

Procedure

September
Federal

26,

Act,

5

2008,

Student

Aid

3

  “Your objection(s) to offset:
(1) You believe this debt is not
an enforceable debt because you were entitled to a forbearance
or deferment; (2) You are concerned about the origination fee
you paid and believe that the loan holder improperly serviced
the account and that your account should not have been assigned
to the Department; (3) You believe the Department should have
offered you income contingent repayment terms.” (Admin. Rec. P.
1). 

Page 5 of 12

office4 that the Department finding Plaintiff’s student loan debt
to

be

legally

originally

enforceable.

filed

in

the

(Docs.

Eastern

1-2).

District

This
of

action

Arkansas.

was
The

Department moved to dismiss Plaintiff’s claims because there are
no facts that make venue appropriate in the Eastern District.
(Doc. 8).

Plaintiff requested, in the interest of justice, that

the Eastern District retain the case, or in the alternative that
it be transferred to the Baltimore Division of the United States
District

Court

for

the

District

of

Maryland.

(Doc.

9).

On

December 15, 2011, Judge Susan Webber Wright found that given
Plaintiff’s pro se status, transfer to the Western District of
Arkansas5, rather than dismissal, would best serve the interests
of

justice.

Judgment
refer

on

(Doc.
the

Plaintiff

10).

grounds
to

The
that

Treasury

Department

the

administrative

Offset

capricious nor an abuse of discretion.
II.

moved

was

neither

for

Summary

decision

to

arbitrary,

(Doc. 18).

Standard of Review

4

  The

hearing official’s decision is the final action of the
Secretary of Education for the purposes of judicial review under
the Administrative Procedure Act.
5 U.S.C.A. § 701, et. seq.
See Bennett v. Spear, 520 U.S. 154, 177-178 (1997)(explaining
that agency action is “final,” and thus subject to judicial
review, when it “marks the consummation of the decisionmaking
process” and “determines a party’s rights or obligations”).

5

Plaintiff has resided in Mena, Arkansas (within the Western
District), since at least 2004. (Doc. 8).
Page 6 of 12

Summary judgment is appropriate when, viewing the facts
and inferences in the light most favorable to the nonmoving
party, “‘the pleadings, the discovery and disclosure materials
on file, and any affidavits show that there is no genuine issue
as to any material fact and that the movant is entitled to
judgment

as

a

matter

of

law.’”

Best

Buy

Stores,

L.P.

v.

Benderson Wainberg Associates, 668 F.3d 1019, 1026 (8th Cir.
2012) (quoting Alvarez v. Des Moines Bolt Supply, Inc., 626 F.3d
410,

416

plain

(8th

language

Cir.
of

2010)(quoting
Rule

56(c)

Fed.R.Civ.P.

mandates

the

56(c)(2)).

entry

of

The

summary

judgment, after adequate time for discovery and upon motion,
against

a

party

who

fails

to

make

a

showing

sufficient

to

establish the existence of an element essential to that party’s
case, and on which that party will bear the burden of proof at
trial.
party

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
seeking

summary

judgment

always

bears

the

“A

initial

responsibility of informing the district court of the basis for
its motion, and identifying those portions of the pleadings,
depositions, answers to interrogatories, and admissions on file,
together

with

the

affidavits,

if

any,

which

it

believes

demonstrate the absence of a genuine issue of material fact.”
Id. at 323.

If the moving party meets the initial burden, the

burden then shifts to the opposing party to produce evidence of
the existence of a genuine issue for trial.
Page 7 of 12

Id. at 324.

A document filed pro se is to be liberally construed and “a
pro se complaint, however inartfully pleaded, must be held to
less

stringent

lawyers.

standards

than

formal

pleadings

drafted

by

Erickson v. Pardus, 551 U.S. 89, 93 (2007).

III. Discussion
In

reviewing

the

decision

of

the

hearing

official’s

rejection of Plaintiff’s claim, the Court inquires whether the
“agency

action,

capricious,

an

findings,
abuse

and

of

conclusions”

discretion,

or

are

“arbitrary,

otherwise

not

in

accordance with law.” 5 U.S.C. § 706(2)(A).
An

agency

action

can

be

set

aside

as

arbitrary

and

capricious if the agency: only relied on factors which Congress
has not intended it to consider, entirely failed to consider an
important aspect of the problem, offered an explanation for its
decision that runs counter to the evidence before the agency or
is so implausible that it could not be ascribed to a difference
in view or the product of agency expertise.

Cent. S.D. Co-op

Grazing Dist. v. Sec'y of United States Dep't of Agric., 266
F.3d 889, 894 (8th Cir. 2001) (quoting Motor Vehicle Mfrs. Ass'n
v. State Farm, 463 U.S. 29, 43 (1983)). Moreover, “the standard
of

review

is

narrow

and

a

court

is

not

to

substitute

its

judgment for that of the agency.” Id., at 895.
Accordingly,
decisions

receive

under
“a

this
high

standard

degree

Page 8 of 12

of

of

review,

judicial

agency

deference.”

Missouri Limestone Producers Ass'n, Inc. v. Browner, 165 F.3d
619, 621 (8th Cir. 1999) (quoting Dubois v. Thomas, 820 F.2d
943,

948–49

(8th

Cir.

1987)).

Utilizing

this

standard,

a

reasonable fact-finder could not conclude that the Department's
decision

was

arbitrary

and

capricious.

All

the

available

evidence, namely the Administrative Record and the pleadings,
lead to the conclusion that the Department made a reasonable
decision that Plaintiff’s debts were valid and enforceable, that
he

was

ineligible

for

additional

forbearance

and

that

his

account was not improperly serviced. Plaintiff does not dispute
the fact that he took out the loans, nor does he allege any
fraudulent

conduct

involved

in

the

execution

of

the

loan

contests

the

applications or promissory notes.
As

the

Department’s

Court
decision

understands,
to

request

Plaintiff
the

Treasury

Department

to

offset his federal and/or state tax refunds and other payments
because

the

evidence

&

original).

hearing
clearly

decision

was

erroneous.”

“contrary
(Doc.

to

the

facts

in

in

the

16)(emphasis

For this proposition, Plaintiff refers twice in his

Motion for Summary Judgment to Paragraph 3 of Page 2 of the
Hearing Decision, which reads:

“The information you provided

shows that UNIPAC Student Loan Center determined that you were
ineligible for forbearance.”
rebuttal

to

the

(Admin. Rec. P. 2, ¶ 3).

Department’s

Motion

Page 9 of 12

for

Summary

In his

Judgment,

Plaintiff

offers

as

evidence

that

he

was

eligible

for

forbearance the fact that the Department “stipulated for the
record that ‘forbearance’ was in fact ‘granted’ to the Plaintiff
on the grounds of ‘financial hardship.’”

(Doc. 21).

Plaintiff

is referring to Paragraph 3 of the Department’s Statement of
Material

Facts:

requested

“Beginning

forbearance

of

on

his

September

student

loan

9,

1983,

Plaintiff

payments,

for

the

reason that he had been temporarily unemployed, and unable to
make his monthly payments.
1984).”

Such was granted up until July 1,

(Doc. 20, ¶ 3).

Plaintiff

is

essentially

arguing

that

because

the

Department granted him forbearance before, it was obligated to
continue to do so until he advised them he was not suffering
economic

hardship;

forbearance

the

eligibility.

Department
While

we

is
are

estopped

from

sympathetic

Plaintiff, this argument is without merit.

denying
with

the

Under the Federal

Family Education Loan and Federal Direct Student Loan Programs
the lender may, but is not required, to grant forbearance upon
properly documented written request.

34 C.F.R. § 682.211(a)(2).

Furthermore, the lender must reasonably believe and document in
the borrower’s file that the borrower intends to repay the loan
but, due to acceptable reasons, is currently unable to make
scheduled payments.

34 C.F.R. § 682.211(a)(2)(i).

When UNIPAC

denied Plaintiff’s last request for forbearance, the decision
Page 10 of 12

maker

noted

loan....”

that

“Borr[ower]

has

shown

no

intent

to

repay

(Doc. 2, Ex. I).

The Hearing Official noted that she reviewed the documents
provided by Plaintiff and those maintained in the Department’s
records.
suggest

In

the

that

absence

the

of

decision

specific
was

facts

arbitrary

or
and

Plaintiff’s allegations are merely conclusory6.
no

evidence

that

the

Department’s

decision

evidence

to

capricious,

Because there is
was

unreasonable,

arbitrary or capricious, summary judgment is appropriate here.
IV.

Conclusion
The Court concludes that there exists no basis to set aside

the agency's decision. For the foregoing reasons, IT IS HEREBY
ORDERED that Plaintiff’s Motion for Summary Judgment (Doc. 16)
is

DENIED,

Defendant

United

States

Department

of

Education’s

Motion for Summary Judgment (Doc. 18) is GRANTED and Plaintiff’s
complaint is dismissed without prejudice.

All parties are to

bear their own costs and fees.

6

Plaintiff’s
lengthy
Complaint
distills
into
three
main
allegations:  1. The Department did not engage in default
aversion activities under 20 U.S.C. § 1078; 2. The Department
denied Plaintiff the opportunity to make an income contingent
repayment plan; and 3. The Department erred in failing to cancel
Plaintiff’s debt because of his status as care-giver to his
father. (Doc. 2).

Page 11 of 12

IT IS SO ORDERED this 22nd day of June, 2012.
/s/ Robert T. Dawson
Honorable Robert T. Dawson
United States District Judge

Page 12 of 12