HICA Education Loan Corporation v. Assadi
Filing
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MEMORANDUM. Signed by Judge William M Nickerson on 8/1/12. (c/m 8/2/12 mps, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
HICA EDUCATIONS LOAN
CORPORATION
v.
HOSSIN ASSADI
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* Civil Action WMN-12-216
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MEMORANDUM
Plaintiff filed the pending case on January 23, 2012,
alleging that Defendant Dr. Hossin Assadi has defaulted on four
promissory notes that he signed pursuant to the provisions of
the United States Health Education Assistance Loan (HEAL)
Program, 42 U.S.C. §§ 292/294 and 42 CFR Part 60.
the current holder of the notes.
Plaintiff is
Dr. Assadi was served with the
complaint on January 31, 2012, and an answer was due on February
21, 2012.
Dr. Assadi did not file an answer or otherwise appear
in the case, so, upon motion by Plaintiff, the Clerk of the
Court entered a default on March 7, 2012.
See ECF Nos. 5 and 6.
Subsequently, on April 3, 2012, Plaintiff filed the pending
Motion for Default Judgment, arguing that it is entitled to a
default judgment because “Defendant has not appeared, answered,
or otherwise pleaded in this case.”
ECF No. 7 at ¶ 3.
Subsequently, on April 9, 2012, the Court received
correspondence from Dr. Assadi, ECF No. 8, indicating that he
had tried to contact Plaintiff’s counsel to resolve the case
outside of court.
As a result, this Court reserved its ruling
on the pending Motion and ordered that Dr. Assadi “show good
cause why the default against him should be set aside.”
9.
ECF No.
In response, Dr. Assadi sent another letter, which this
Court received on May 15, 2012, explaining the hardships that
had fallen upon Dr. Assadi and his family.
See ECF No. 10.
The
Court will treat this letter as it would a Motion to Set Aside
Default pursuant to Rule 55(c).
Dr. Assadi explains that his
wife, with whom he partnered in a private medical practice, had
become severely ill and was unable to continue working.
As a
result, Dr. Assadi had to take care of his wife and his four
children, in addition to taking over administration of the
medical practice.
The billing company that his medical practice
had hired did not manage the practice’s accounts well and when
its contract ended, the practice was without income for several
months.
Dr. Assadi acknowledges that at that point in time he
could no longer afford to pay his business and personal
expenses, including his student loans.
Dr. Assadi also notes that he was in contact with
Plaintiff’s counsel to discuss “what the plan would be,” but
never received a follow-up call.
month towards his loans.
He offered to pay $100.00 per
He also was contacted by a
representative from Sallie Mae who advised that it was better
that he go into default, as his loans were guaranteed by the
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U.S. Department of Health and Human Services (HHS), which would
pay back the money to Sallie Mae and arrange for Dr. Assadi to
repay the loans directly to HHS.
Dr. Assadi emphasizes that his
family is trying to recover and he is making every effort to
correct his financial situation, and requests that the Court
consider these circumstances when making its decision.
Rule 55(c) gives the Court discretion to set aside an entry
of default for “good cause.”
Courts must consider several
factors to determine whether Rule 55(c) good cause exists,
including, whether the defendant has a meritorious defense.
Mezu v. Morgan St. Univ., Civ. No. 09-WMN-2855, 2010 WL 1068063,
*6 (D. Md. Mar. 18, 2010) (citing Consol. Masonry &
Fireproofing, Inc. v. Wagman Const. Corp., 383 F.2d 249, 251
(4th Cir. 1967)); United States v. Moradi, 673 F.2d 725, 727-28
(4th Cir. 1982).
This is a critical factor because without a
meritorious defense, a party cannot win at trial, so there would
be no point in setting aside a default if the party is not able
to demonstrate the possibility of his winning.
United States v.
$55,518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984).
To establish the existence of a meritorious defense, a
party must present or proffer evidence “which, if believed,
would permit either the Court or the jury to find for the
defaulting party.”
Moradi, 673 F.2d at 727.
While Dr. Assadi
has related the unfortunate set of circumstances that have led
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to his inability to make payments on his student loans, he has
not raised any actual defenses.
He has conceded that he stopped
paying the loans and has not alleged any neglect or wrongdoing
on the part of Plaintiff or any other entities involved in the
administration of his student loans.
The Court is sympathetic
to the difficulties with which Dr. Assadi has had to contend,
but because he has not alleged any meritorious defenses, there
is no good cause to set aside the default.
See United States v.
Flynn, No. 5:10-CV-2, 2011 WL 2173705 at *2 (W.D.N.C. June 2,
2011) (“By admitting that he intended to pay the student loans
back and by failing to deny any of the allegations in the
Complaint, Defendant has “failed to ... otherwise defend” this
action under Rule 55(a),” so an entry of Default is therefore
appropriate.)
Moreover, the Court will grant Plaintiff’s Motion for
Default Judgment.
The question of whether to grant a default
judgment under Federal Rule of Civil Procedure 55(b) is “a
matter resting in the sound discretion of the District Judge.”
Papagiankis v. The Samos, 186 F.2d 257, 263 (4th Cir. 1950).
In
making its decision, the Court may consider a number of factors,
including whether there are any material issues of fact and
whether the grounds for default have been clearly established.
See EMI April Music, Inc. v. White, 618 F. Supp. 2d 497, 506
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(E.D. Va. 2009) (citing Wright, Miller & Kane, Federal Practice
& Procedure: Civil 3d § 2685).
In its Complaint, Plaintiff alleges that Dr. Assadi
defaulted on his loans and attached copies of the signed
promissory notes and documents evidencing its ownership of the
promissory notes.1
See ECF No. 1-2.
Dr. Assadi does not dispute
these allegations or the authenticity of the documentation.
Though the Court acknowledges that default judgments are
generally disfavored, see United States v. Shaffer Equip. Co.,
11 F.3d 450, 462 (4th Cir. 1993), because there are no material
issues of fact and, as discussed above, the grounds for default
have been clearly established, entry of a default judgment is
appropriate.
Furthermore, Dr. Assadi does not dispute the amount of
damages alleged by Plaintiff.
These damages equal the amount of
unpaid principle and accrued interest on each loan, as reflected
by Plaintiff’s records.
The Court will award these undisputed
damages, as calculated in the Motion for Default Judgment.
ECF No. 7.
See
A separate order will issue.
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“To establish a prima facie case of a student loan default, the
[plaintiff] must prove three elements: (1) the defendant signed
a promissory note for a student loan; (2) the [plaintiff] owns
the promissory note signed by the defendant, and (3) the
defendant has defaulted on the note.” United States v. White,
No. 5:08-CV-348-F, 2009 WL 3872342 (E.D.N.C. Nov. 18, 2009)
(citing United States v. Davis, 28 Fed. App’x. 502, 503 (6th
Cir. 2002); United States v. Lawrence, 276 F.3d 193, 197 (5th
Cir. 2001)).
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_______________/s/________________
William M. Nickerson
Senior United States District Judge
DATE: August 1, 2012
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