United States of America v. Hand

Filing 18

ORDER granting 9 Motion for Summary Judgment. Plaintiff shall submit a proposed judgment to the Court within ten (10) days of this order. Signed by Judge Charles C. Lovell on 1/18/2017. (MKB) Modified on 1/18/2017 copy of Order mailed to Defendant(DED).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
HELENA DIVISION

UNITED STATES OF AMERICA,

CV 15–96–H–CCL

Plaintiff,
ORDER

vs.
KEVIN C. HAND,
Defendant.

This is a student loan debt collection action. The case is now before the
Court on the United States Department of Education’s motion for summary
judgment. Defendant Kevin C. Hand, appearing pro se, failed to respond to the
motion. On October 25, 2016, the Court ordered Defendant to show cause why
the motion for summary judgment should not be granted. (ECF No. 14.)
Defendant responded on November 3, 2016. (ECF No. 16.)

Background
On November 3, 2015, Plaintiff filed this action against Defendant for
recovery of $50,186.22 (calculated as of July 25, 2016). This amount consists of
principal in the amount of $30,107.88 and interest in the amount of $20,078.34.
Interest is computed at the rate of $2.88 per day from July 25, 2016, until the date
of judgment. (ECF No. 10, United States Statement of Undisputed Facts, ¶ 5.)
Plaintiff presents the Declaration of Delfin M. Reyes, loan analyst with the United
States Department of Education. (ECF No. 11.) Defendant’s principal
indebtedness results from four promissory notes, all of which were authorized by
the Higher Education Act of 1965, as amended, 20 U.S.C. 1071 et seq.
In response to this Court’s order to show cause, Defendant Hand responded
on November 3, 2016, by asserting that it violates his civil rights to be forced to
represent himself, by asserting that he has not asked for and does not desire to
consolidate his four student loans, and, finally, by asserting that “he is qualified
for Student Loan Forgiveness due to current health issues, ability to work and time
of Loans.” (ECF No. 16 at 2.) Further, Defendant states that he “shall call 1-8442

325-1189 to apply for such debt relief.” (ECF No. 16 at 2.) However, that filing
was made six weeks ago, and the Court has received no further information from
Defendant Hand regarding his intention to seek debt relief.
Legal Standard
Summary judgment is proper when the movant shows that there is no
genuine issue of material fact and the movant is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(a). The initial burden of demonstrating the absence of a
genuine issue of fact is on the moving party. Celotex Corp. v. Catrett, 477 U.S.
317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In determining whether this
burden has been met, the court must view the evidence in the light most favorable
to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
Once this initial burden is met, the opposing party must “go beyond the
pleadings” and “set forth specific facts showing that there is a genuine issue for
trial.” Celotex Corp., 477 U.S. at 248, 106 S.Ct. at 2510 (internal quotes omitted).
“If a party fails to properly support an assertion of facts or fails to properly address
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another party’s assertion of fact as required by Rule 56(c), the court may . . .
consider the fact undisputed for the purposes of the motion. . . .” Rule 56(e)(2).
“[A] party cannot manufacture a genuine issue of material fact merely by
making assertions in its legal memoranda.” S.A. Empresa de Viacao Aerea Rio
Grandense (Varig Airlines) v. Walter Kiddle & Co., 690 F.2d 1235, 1238 (9th Cir.
1982). The non-moving party “must show more than the mere scintilla of
evidence” or a “metaphysical doubt as to the material facts at issue.” In re Oracle
Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010 (citations omitted);
After the movant’s initial burden has been met, the non-moving party must
go beyond the pleadings and–by its own affidavits or discovery–set forth specific
facts showing a genuine issue for trial. See Fed.R.Civ.P. 56(e); Celotex Corp., 477
U.S. at 324; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 58687 (1986). If the non-moving party does not produce evidence to show a genuine
issue of material fact, the moving party is entitled to summary judgment. In ruling
on a motion for summary judgment, inferences drawn from the underlying facts
are viewed in the light most favorable to the non-moving party. See Matsushita,
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475 U.S. at 587.
Discussion
Plaintiff is entitled to collect unpaid principal and accrued interest on
defaulted student loans insured under The Higher Education Act of 1965. See 20
U.S.C. § 1080(a).
In order to present a prima facie case of student loan debt collection, the
United States must prove three elements: “(1) the defendant signed a promissory
note for a student loan; (2) the government owns the promissory note signed by
the defendant; and (3) the promissory note has not been repaid or discharged.”
United States v. Gazanferi, 2016 WL 4491864 (C.D. Cal., Aug. 25, 2016)
(citations omitted).
The evidence presented by Plaintiff shows that Defendant executed his first
promissory note in the amount of $2,625.00 on January 5, 1994. Defendant
executed his second promissory note in the amount of $4,000.00 on March 3,
1994. Defendant executed his third promissory note in the amount of $6,625.00
on June 1, 1994. Defendant executed his fourth promissory note in the amount of
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$6,625.00 on September 21, 1996. As evidenced by the Certificate of
Indebtedness attached to Plaintiff’s Complaint as Exhibit E, and signed under
penalty of perjury as required by law, Defendant defaulted on each of the four
promissory notes on January 30, 2001. (ECF No. 1-5.) As of that date of default,
Defendant had paid the following amounts on the four promissory notes: $221.51,
$381.58, $547.60, and $474.31. (ECF No. 1-5.) Fifteen years have passed since
these loans defaulted, and during that period an additional $1,625.00 has been
credited to Defendant’s loans, mostly by tax refunds. (ECF No. 12 at 6, Pl’s Brief
in Supp.) After crediting all payments made by the Defendant, the Department of
Education now certifies that Defendant continues to owe principal ($30,1076.88)1
and interest ($20,078.34) on the loans, plus continuing interest at the rate of $2.88
per day, and that the guarantor of the loans has assigned its rights and title to the
Department of Education. This evidence is sufficient to meet Plaintiff’s burden of

1

At the time of default, both principal and interest accrued was paid by the
Department of Education to the lender. Interest owing on that date was
capitalized, meaning it was added to the unpaid principal balance. 34 C.F.R.
§ 682.410(b)(4).
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proof and to shift the burden to Defendant to establish some genuine material fact
that must be tried.
Defendant’s response to the order to show cause fails to raise any genuine
issue of material fact requiring trial. Besides asserting that he should have
appointed counsel to help him defend,2 the only defense that Defendant raises is
that he is disabled and thus without capacity to make payments on his student loan
debts. This may well be the case, however, only the Department of Education has
the authority to discharge Defendant’s loans, not this Court. 20 U.S.C. § 1087. If
Defendant decides to present an application of disability to the Department of
Education, that agency can instruct the Department of Justice to cease collections
on the judgment. In addition, the Plaintiff acknowledges that if Plaintiff discovers

2

There is no entitlement to appointed counsel in a civil case. See Palmer v.
Valdez, 560 F.3d 965, 970 (9th Cir. 2009). The Court has previously determined
that exceptional circumstances do not exist that would justify appointment of
counsel in this case. (ECF No. 7.)
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that Defendant’s income is low and his assets are exempt,3 Plaintiff may be unable
to collect on the judgment. (ECF No. 12 at 7.) The Court concludes that the law
and the facts warrant granting the Plaintiff’s motion for summary judgment.
Accordingly,
IT IS HEREBY ORDERED that Plaintiff’s Motion for Summary Judgment
is GRANTED. Plaintiff shall submit a proposed judgment to the Court within ten
(10) days.
Dated this 18th day of January, 2017.

3

Exempt assets include a homestead (up to $250,000), household
goods/furnishings (up to $4,500), a vehicle (up to $2,500), public assistance and
Social Security benefits, retirement benefits, and many others. (ECF 12-2,
“Exemptions Under Montana State Law.”)
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