HICA EDUCATION LOAN CORPORATION v. CALLWOOD

Filing 17

MEMORANDUM OPINION AND ORDER signed by CHIEF JUDGE WILLIAM L. OSTEEN JR. on 9/30/2013. This court does not find that subject-matter jurisdiction is vested in this court. Accordingly, this court finds this case should be dismissed without prejudice. A Judgment dismissing this action will be entered contemporaneously with this Order. (Daniel, J)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

HICA EDUCATION LOAN
CORPORATION,
Plaintiff,
v.
DWAYNE D. CALLWOOD,
Defendant.

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1:11CV750

MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
Presently before the court is Plaintiff’s Motion for
Summary Judgment (Doc. 12).

Plaintiff HICA Education Loan Corp.

(“Plaintiff” or “HICA”) has filed a brief (Doc. 13) in support
of its motion.

Defendant Dwayne D. Callwood (“Defendant”) has

declined to file a response to Plaintiff’s Motion for Summary
Judgment.

However, upon review of the summary judgment

pleadings, this court raised, sua sponte, the issue of subject
matter jurisdiction.
According to the Complaint, jurisdiction is proper pursuant
to 28 U.S.C. § 1331 in that this case arises under the laws of
the United States, namely, 42 U.S.C. §§ 294 et seq.
(Doc. 1) ¶ 3.)

(Complaint

However, a number of courts have held that there

is no federal jurisdiction for a HICA collection action such as

this case.

As a result, this court requested supplemental

briefing from the parties as to the issue of jurisdiction.
Plaintiff filed a brief; Defendant did not file a response.
After careful review of Plaintiff’s brief and the applicable
law, this court finds that jurisdiction is not present, and this
case should be dismissed without prejudice to allow Plaintiff to
refile in the proper court.
Federal courts are courts of limited jurisdiction, and this
court has “an independent obligation to determine whether
subject-matter jurisdiction exists, even when no party
challenges it.”

Hertz Corp. v. Friend, 559 U.S. 77, 94 (2010).

Here, although jurisdiction is admitted (see Answer (Doc. 8)
¶ 3), subject-matter jurisdiction “can never be forfeited or
waived. . . . [C]ourts . . . have an independent obligation to
determine whether subject matter jurisdiction exists, even in
the absence of a challenge from any party.” Arbaugh v. Y&H
Corp., 546 U.S. 500, 514 (2006).
Although neither the Fourth Circuit nor a district court in
the Fourth Circuit have specifically ruled on this

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jurisdictional issue1, at least two courts have recently
determined that there is no subject matter jurisdiction in a
case such as this.

See HICA Educ. Loan Corp. v. Mittelstedt,

No. 12–cv–512–wmc, 2013 WL 2112233 (W.D. Wis. May 15, 2013);
HICA Educ. Loan Corp. v. Kotlyarov, No. 11 Civ. 1050(DAB)(FM),
2013 WL 4007582 (S.D.N.Y. Aug. 6, 2013) (Report and
Recommendation); and HICA Educ. Loan Corp. v. Kotlyarov, No. 11
Civ. 1050(DAB), 2013 WL 4617424 (S.D.N.Y. Aug. 29, 2013) (Order
adopting Recommendation).
Plaintiff argues, with some persuasive force, that the
regulatory and statutory framework as to the HICA program and a
HICA loan establishes federal question jurisdiction.

In support

of this proposition, Plaintiff cites a Texas District Court
opinion, HICA Educ. Loan Corp. v. Spears, Case No. 4:11-cv-38-A
(N.D. Texas 2011).

The Spears case was decided in 2011, prior

to the Mittelstedt decision, and this court does not find the
Spears authority persuasive.

Instead, this court finds the

reasoning set forth in Mittelstedt persuasive and adopts that
reasoning in full.

Mittelstedt, 2013 WL 2112233.

“HICA’s claim

At least one district court within the Fourth Circuit has
granted default judgment on HICA loans, but it did not
specifically address jurisdiction. See HICA Educs. Loan Corp.
v. Assadi, Civil Action No. WMN-12-216, 2012 WL 3156828 (D. Md.
Aug. 1, 2012).
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in this action presents no discernible federal issue at all, let
alone one that either is disputed or substantial.

Rather, the

sole issue in the case is whether HICA is entitled to collect on
[Defendant’s] two defaulted promissory notes.”

HICA v.

Kotlyarov, 2013 WL 40075822, at *2.
Although it is undisputed that Plaintiff is entitled to
relief on the collection for nonpayment, this court does not
find that subject-matter jurisdiction is vested in this court.
Accordingly, this court finds this case should be dismissed
without prejudice.
IT IS THEREFORE ORDERED that this case is DISMISSED WITHOUT
PREJUDICE.

A Judgment dismissing this action will be entered

contemporaneously with this Order.
This the 30th day of September, 2013.

_______________________________________
United States District Judge

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