United States of America v. Bright
Filing
20
ORDER AND REASONS granting 12 Motion for Summary Judgment. Signed by Judge Martin L.C. Feldman on 12/21/2011. (caa, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
UNITED STATES OF AMERICA
CIVIL ACTION
VERSUS
NO. 11-1518
RAY A. BRIGHT
SECTION “F”
ORDER AND REASONS
Before the Court is the United States’ motion for summary
judgment.
For the reasons that follow, the motion is GRANTED.
Background
This litigation arises from a default on the repayment of a
student loan.
On September 24, 2004 Ray Bright applied for a student loan
and signed a promissory note to secure a direct consolidation loan
from the U.S. Department of Education (DOE) in the amount of
$108,206.15; the note provided for interest at the rate of 8.25%
per year.
The loan was made by the DOE under the William D. Ford
Federal Direct Loan Program under Title IV, Part D of the Higher
Education Act of 1965.
685.
20 U.S.C. §§ 1087a, et seq.; 34 C.F.R. Part
Some time after the DOE made the loan, the United States made
demand for payment.
Bright defaulted on the repayment of the note
and his unpaid interest was capitalized and added to the principal
1
balance. The United States sued Bright on June 27, 2011 to recover
the
debt,
asserting
that
Bright
is
indebted
to
it
for
the
promissory note in the amount of $172,224.44, interest at the daily
rate of $34.22 from April 19, 2011 to the date of judgment, plus
post-judgment interest under 28 U.S.C. § 1961, and the costs of
these proceedings.1
After being served with the lawsuit, Bright filed a motion to
dismiss for failure to join indispensable parties; the Court denied
that motion.2
Bright then answered the lawsuit, denying, for lack
of knowledge, each of the complaint’s allegations; he also asserted
affirmative
defenses
including
failure
to
exhaust
internal
remedies, tender excused by law, absence of good faith, and
inequitable acceleration of a debt.
The United States now seeks
summary judgment on the defaulted promissory note to recover the
1
According to the record, Bright was in default beginning
on June 18, 2010 and his loan was referred to litigation almost one
year later on May 9, 2011. Since the time Bright’s loan was made
until litigation began, Bright did not pay anything towards his
outstanding balance.
2
Before referring Bright’s defaulted student loan and
promissory note to the Department of Justice for litigation, the
DOE hired Premiere Credit of North America, L.L.C. to pursue
collection of the debt.
After the United States filed suit,
Bright, pro se, requested dismissal of the United States’s
complaint for failure to join Premiere Credit and the Department of
Education, which he suggested are indispensable parties. The Court
disagreed.
2
debt.3
I. Standard for Summary Judgment
Federal Rule of Civil Procedure 56 instructs that summary
judgment is proper if the record discloses no genuine dispute as to
any material fact such that the moving party is entitled to
judgment as a matter of law.
No genuine issue of fact exists if
the record taken as a whole could not lead a rational trier of fact
to find for the non-moving party.
See Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
A genuine issue
of fact exists only "if the evidence is such that a reasonable jury
could return a verdict for the non-moving party."
Anderson v.
3
Bright previously requested that this Court defer ruling
on the United States’ motion for summary judgment to allow him
additional time to submit his opposition papers; he also requested
more time to engage in discovery.
The Court allowed Bright
additional time to submit his opposition papers, but denied his
request that he be permitted even more time for discovery. See
Order dated November 21, 2011, in which the Court determined that:
The defendant has not made a sufficient
showing pursuant to Federal Rule of Civil
Procedure 56(d) that would warrant granting
him 60 days to participate in discovery;
however, the Court will permit additional time
for the defendant to submit his opposition
papers. The defendant suggests that discovery
would allow him to show, among other things,
that he did not default on his loan, that he
was entitled to discharge his student loan
based upon disability, and that he was
entitled to rehabilitation of his student loan
based upon financial hardship. The defendant
has failed to show that he needs to obtain
evidence from the plaintiff in order to
support these defenses.
3
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The Court emphasizes that the mere argued existence of a
factual dispute does not defeat an otherwise properly supported
motion.
See
id.
Therefore,
"[i]f
the
evidence
is
merely
colorable, or is not significantly probative," summary judgment is
appropriate.
Id. at 249-50 (citations omitted).
Summary judgment
is also proper if the party opposing the motion fails to establish
an essential element of his case.
477 U.S. 317, 322-23 (1986).
See Celotex Corp. v. Catrett,
In this regard, the non-moving party
must do more than simply deny the allegations raised by the moving
party.
See Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d
646, 649 (5th Cir. 1992).
Rather, he must come forward with
competent evidence, such as affidavits or depositions, to buttress
his claims.
Id.
Hearsay evidence and unsworn documents do not
qualify as competent opposing evidence.
Martin v. John W. Stone
Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987). Finally, in
evaluating the summary judgment motion, the Court must read the
facts
in
the
light
most
favorable
to
the
non-moving
party.
Anderson, 477 U.S. at 255.
II.
“[S]uits to enforce promissory notes are among the most
suitable classes of cases for summary judgment.”
Colony Creek,
Ltd. v. Resolution Trust Corp., 941 F.2d 1323, 1325 (5th Cir. 1991);
FDIC v. Salaiden Builders, Inc., 973 F.2d 1249, 1253-54 (5th Cir.
4
1992)(suits on promissory notes “provide fit grist for the summary
judgment mill”).
To recover on a promissory note, the United States must
establish that: (1) Bright signed the note; (2) the United States
is the current owner or holder of the note; and (3) the note is in
default.
United States v. Lawrence, 276 F.3d 193, 197 (5th Cir.
2001); FDIC v. McCrary, 977 F.2d 192, 194 n.5 (5th Cir. 1992).
Where,
as
here,
the
United
States
submits
record
evidence
discharging its summary judgment burden on its prima facie case,4
the
burden
shifts
to
Bright
to
establish
the
nonexistence,
extinguishment or variance in payment of the obligation.
United
States v. Irby, 517 F.2d 1042, 1043 (5th Cir. 1975); United States
v. Ward, No. 92-1786, 1992 WL 373557, at *2 (E.D. La. Dec. 7,
1992)(Clement, J.); United States v. Bertucci, No. 00-78, 2000 WL
1234560, at *2 (E.D. La. May 30, 2000).
In the absence of such
proof,
the
summary
appropriate.
judgment
in
favor
of
United
States
is
Id.
Bright contends that summary judgment is inappropriate because
he should have been entitled to either a disability discharge, or
rehabilitation of his defaulted loan before litigation began.
But
to preclude summary judgment Bright must submit, through competent
4
The United States submits the sworn certificate of
indebtedness, as well as the promissory note signed by Ray Bright.
Bright does not credibly dispute the United States’ prima facie
case; rather, he suggests that
the debt “should” have been
discharged.
5
summary judgment evidence, facts showing a genuine dispute for
trial.
He has not done so.
Bright has not demonstrated that he can carry his burden to
show either that his debt has been rehabilitated or discharged; he
argues only that the debt “should be” or “should have been”
rehabilitated because of his financial hardship, or “should be” or
“should have been” discharged because of his disability.
This
falls far short of submitting evidence that a genuine dispute
remains
as
to
whether
Bright’s
rehabilitated or discharged.
pursued
administrative
debt
has,
in
fact,
been
Although Bright suggests that he
remedies
in
attempt
to
have
his
debt
discharged,5 his only record evidence in support of this assertion
demonstrates that his administrative effort, in which he sent a
letter to the DOE (after this litigation had been instituted
against him), was denied.6
5
The DOE regulations provide an administrative process
for debtors seeking to cancel their student loans based on certain
circumstances, including discharge for disabled veterans.
See,
e.g., 34 C.F.R. § 685.213.
6
The United States points out that the DOE’s discharge
regulation for veterans provides that:
a veteran must submit a discharge application
to the Secretary approved by the Secretary.
The application must be accompanied by
documentation from the Department of Veterans
Affairs showing that the Department of
Veterans Affairs has determined that the
veteran is unemployable due to a serviceconnected disability.
6
Bright’s argument that he is entitled to rehabilitation of his
defaulted student loan, because of his financial hardship, likewise
fails to preclude summary judgment.
The DOE’s rehabilitation
regulation for Ford direct loans provides:
A defaulted Direct Loan...is rehabilitated if the
borrower makes nine voluntary, reasonable, and affordable
monthly payments within 20 days of the due date during
ten consecutive months. The amount of such a payment is
determined on the basis of the borrower’s total financial
circumstances.
34 C.F.R. § 685.211(f)(1). Bright has not established that the DOE
rehabilitated his loan; nor has he presented any evidence to this
Court (or, presumably to the DOE) that confirms that he would have
been eligible for rehabilitation, in light the regulation’s clear
requirement that he earn this special status based on voluntary
payments:
anything
the record evidence confirms that Bright has not paid
towards
his
outstanding
balance
disbursed and this litigation commenced.
since
the
loan
was
Ultimately, Bright has
failed to present any evidence sufficient to create any dispute
concerning whether the United States is entitled to a judgment in
its favor on his defaulted loan.
34 C.F.R. § 685.213(c)(1).
There is nothing in the record
suggesting that Bright has documentation from Veterans Affairs
making the requisite determination, or that such documentation was
ever produced to the DOE.
Even if Bright had provided
documentation to this Court that might suggest his eligibility for
discharge, only the Secretary of Education, not this Court, has the
discretion to discharge a loan. See United States v. Bertucci, No.
00-78, 2000 WL 1234560, at *2 (E.D. La. May 30, 2000)(citation
omitted).
7
Accordingly, the plaintiff’s motion for summary judgment is
GRANTED.7
New Orleans, Louisiana, December 21, 2011
______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE
7
To the extent Bright again requests additional time to
engage in discovery, the Court again denies his request for the
same reasons already stated in its November 21, 2011 Order.
8
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