Marek v. Navient Corporation et al
Opinion and Order For the reasons stated in the Order, Defendants' Defendants' Motion to Dismiss, Doc. #: 4 , is GRANTED, and the case is dismissed with prejudice on the basis of claim preclusion. Signed by Judge Dan Aaron Polster on 7/6/2017.(K,K)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
NAVIENT CORPORATION and
NAVIENT SOLUTIONS, INC.
CASE NO. 1:17-CV-01020-DAP
JUDGE DAN AARON POLSTER
OPINION AND ORDER
Before the Court is Defendant Navient Solutions, LLC’s1 Motion to Dismiss Complaint.
Doc #: 4. For the reasons stated below, the Court grants the Motion.
Between 1995 and 2000, Robert Marek borrowed over $130,000 in federal Parent Loan
for Undergraduate Students (“PLUS”) loans under the Federal Family Education Loans (“FFEL”)
program to pay for tuition, room and board, and related college expenses for Marek’s three
children. Compl. ¶ 5, Doc #: 1. Sallie Mae, Inc. was the federal loan servicer for the PLUS loans.
Id. ¶ 6. On November 23, 2001, Marek’s PLUS loans were consolidated, still under the FFEL
Navient Solutions, LLC, was improperly named “Navient Corporation” and “Navient
Solutions, Inc.” in Robert Marek’s Complaint. Mot. to Dismiss 1, Doc #: 4.
program, totaling $148,736.23 with an interest rate of 6.750%. Id. Between 2001 and 2014,
Marek paid $27,934 on the consolidated PLUS loans. Id. ¶ 7.
During this time, Navient Solutions, LLC, (“Navient”) was a subsidiary to Sallie Mae,
Inc., the loan service provider. Compl. ¶¶ 6, 8. On October 13, 2014, Sallie Mae, Inc. and
Navient separated, and Navient became the loan service provider for Marek’s consolidated PLUS
loans. Id. ¶ 8.
On August 1, 2016, Marek applied for an Income-Sensitive Repayment Plan (“ISRP”)
with Navient. Compl. ¶ 18. In his ISRP application, Marek requested to pay Navient twenty
percent of his $2,590 gross monthly income. Id. ex. A, at 1. In the application, Marek also
requested a reduced-payment forbearance. Id. The application explained that a reduced-payment
forbearance would allow Marek “to pay less than the interest accruing monthly on [his] loan(s)
because [he had] a financial hardship.” Id. Marek included several documents in his ISRP
application related to his financial situation. Id. at 3–5.
On August 4, 2016, Navient sent two contradictory letter in response to Marek’s ISRP
application. Compl. exs. B, C. One letter indicated that Marek’s ISRP application had been
approved and that he would have a monthly payment plan of $1,863.07 for a twelve-month
period. Compl. ex. C. The other letter explained that Navient could not process Marek’s
application because the monthly income he listed on the application was less than the income on
other documentation he provided. Compl. ex. B.
The Complaint discussed nothing further until March 20, 2017, when Marek claimed that
he owed Navient $348,892.16 for his PLUS loans. Compl. ¶ 7. As of March 21, 2017, Marek
also owed Navient “hundreds of dollars in late fees.” Id. ¶ 22.
The procedural history of this case is more involved.
Marek’s First Action (the “First Action”)
On August 15, 2016, Marek, pro se,2 filed his first complaint against Navient. Compl. for
Declaratory J. ¶ 1, Marek v. Navient Corp., No. 1:16CV2031, Doc #: 1 [hereinafter First
Complaint]. The First Complaint related to the PLUS loans that Marek owed to Navient. Id. ¶¶ 6,
8. Marek asserted in his First Complaint that his action was “for [a] declaratory judgment.” Id. ¶
1. Specifically, Marek claimed that Navient approved his ISRP for a monthly payment plan of
$1,863.07, which was over seventy percent of Marek’s gross monthly income of $2,590.11. Id.
¶¶ 14, 16.
On September 29, 2016, Navient moved to dismiss the First Complaint for failure to state
a claim upon which relief can be granted, pursuant to Fed. R. Civ. P. 12(b)(6). Mot. to Dismiss 1,
Marek v. Navient Corp., No. 1:16CV2031, Doc #: 11. The case was referred to Magistrate Judge
David A. Ruiz for a Report and Recommendation. The magistrate judge observed that the First
Complaint did not state a claim upon which relief could be granted. Marek v. Navient Corp., No.
1:16-cv-02031, 2016 U.S. Dist. LEXIS 180826, at *3 (N.D. Ohio Dec. 6, 2016) (report and
recommendation). The magistrate judge recommended that Navient’s motion to dismiss be
granted and that Marek’s First Complaint be dismissed with prejudice. Id. at 9. District Judge
Boyko agreed. Marek v. Navient Corp., No. 1:16CV2031, 2017 U.S. Dist. LEXIS 868, at 4 (N.D.
Ohio Jan. 4, 2017), Doc #: 19. Judge Boyko also explained that “[Marek] simply complains that
[Navient] should have approved the repayment amount that [Marek] want[ed] to make,” and that
Marek is an attorney serving as his own counsel.
Marek’s agreement with Navient was not breached. Id. Judge Boyko granted Navient’s motion to
dismiss with prejudice. Id. at 4.
Marek’s Second Action (the “Second Action”)
On May 16, 2017, Marek filed a new complaint, again pro se, against Navient which is
presently before this Court (the “Complaint” or the “Second Complaint”). Doc #: 1. Marek’s
Second Complaint alleged many of the same facts as the First Complaint. Id. In his Second
Complaint, Marek alleged “fraud, and unfair, deceptive or abusive acts and practices under the
Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. Section 1692 et seq., engaged in by
Navient as a student loan servicer and collector.” Compl. ¶ 1.
On June 7, 2017, Navient filed its Motion to Dismiss Complaint (the “Motion to
Dismiss”). Doc #: 4. Navient argued that Marek’s Second Complaint should be dismissed for
three reasons. First, Navient asserted that Marek’s claims are barred by claim preclusion because
the Second Complaint presented the same claims that were or could have been presented in the
First Action. Id. at 3. Second, Navient asserted that Marek’s FDCPA claim fails as a matter of
law. Id. at 5. Third, Navient asserted that Marek failed to state a viable fraud claim. Id. at 6.
On June 20, 2017, Marek filed his Opposition to Defendants’ Motion to Dismiss
Complaint (the “Opposition”). Opp’n, Doc #: 5. On June 30, Navient filed a Reply. Doc #: 7.
This Order follows.
Pursuant to Fed. R. Civ. P. 8(a)(2), a complaint must allege sufficient facts to compose “a
short and plain statement of the claim showing that the pleader is entitled to relief.” “To state a
valid claim, a complaint must contain direct or inferential allegations respecting all the material
elements under some viable legal theory.” Commercial Money Ctr., Inc. v. Illinois Union Ins.
Co., 508 F.3d 327, 336 (6th Cir. 2007).
In evaluating a Rule 12(b)(6) motion to dismiss, courts must construe the complaint in the
light most favorable to the plaintiff and accept the complaint’s allegations as true, drawing all
reasonable inferences in favor of the plaintiff. Coley v. Lucas Cty., Ohio, 799 F.3d 530, 537 (6th
To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is plausible on its face.
A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged. The plausibility standard is not akin to a
probability requirement, but it asks for more than a sheer possibility that a
defendant has acted unlawfully. Where a complaint pleads facts that are
merely consistent with a defendant’s liability, it stops short of the line
between possibility and plausibility of entitlement to relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations and quotation marks omitted).
“For a claim to be viable, the complaint must, at a minimum, give the defendant fair notice of
what the claim is and the grounds upon which it rests.” Marie v. Am. Red Cross, 771 F.3d 344,
364 (6th Cir. 2014) (internal quotation marks omitted). Dismissal with prejudice is inappropriate
where “a more carefully drafted complaint might state a claim.” U.S. ex rel. Bledsoe v. Cmty.
Health Sys., Inc., 342 F.3d 634, 644 (6th Cir. 2003) (quoting EEOC v. Ohio Edison Co., 7 F.3d
541, 546 (6th Cir. 1993)).
In its Motion to Dismiss, Navient argues that Marek’s Second Action is barred by res
judicata. Mot. to Dismiss 3.
In federal court, res judicata may be raised at the Fed. R. Civ. P. 12(b)(6) motion to
dismiss phase. See City of Canton, Ohio v. Maynard, 766 F.2d 236, 237 (6th Cir. 1985)
(affirming district court's rule 12(b)(6) dismissal on res judicata grounds). “Federal courts must
give the same preclusive effect to a state-court judgment as that judgment receives in the
rendering state.” Buck v. Thomas M. Cooley Law Sch., 597 F.3d 812, 816–17 (6th Cir. 2010)
(quoting Abbott v. Michigan, 474 F.3d 324, 330 (6th Cir.2007)). Thus, the Court follows Ohio
law in analyzing res judicata.
“Under Ohio law, ‘[t]he doctrine of res judicata encompasses the two related concepts of
claim preclusion, also known as res judicata or estoppel by judgment, and issue preclusion, also
known as collateral estoppel.’” Anderson v. City of Blue Ash, 798 F.3d 338, 350-51 (6th Cir.
2015) (quoting O'Nesti v. DeBartolo Realty Corp., 862 N.E.2d 803, 806 (Ohio 2007)). For
clarity, the Court will refer to them going forward as “claim preclusion” and “issue preclusion”
Claim preclusion prevents subsequent actions, by the same parties or their
privies, based upon any claim arising out of a transaction that was the subject
matter of a previous action. The doctrine also bars any subsequent action whose
claims could have been litigated in the previous suit. Issue preclusion, on the
other hand, serves to prevent relitigation of any fact or point that was determined
by a court of competent jurisdiction in a previous action between the same
parties or their privies, and applies even if the causes of action differ.
Anderson v. City of Blue Ash, 798 F.3d 338, 350 (6th Cir. 2015) (emphasis added) (citations and
internal quotations marks omitted) (quoting O'Nesti v. DeBartolo Realty Corp., 862 N.E.2d 803,
806 (Ohio 2007)). At issue in this case is claim preclusion.
In Ohio, claim preclusion has four elements:
(1) a prior final, valid decision on the merits by a court of competent
jurisdiction; (2) a second action involving the same parties, or their privies, as
the first; (3) a second action raising claims that were or could have been litigated
in the first action; and (4) a second action arising out of the transaction or
occurrence that was the subject matter of the previous action.
Hapgood v. City of Warren, 127 F.3d 490, 493 (6th Cir. 1997); accord Carroll v. City of
Cleveland, 522 F. App'x 299, 303 (6th Cir. 2013).
Judge Boyko issued a valid, final judgment on the merits in the First Action.
“Normally, Rule 12(b)(6) judgments are dismissals on the merits.” Rogers v. Stratton
Indus., Inc., 798 f.2d 913, 917 (6th Cir. 1986) (cited by Cobbs v. Katona, 8 F. App'x 437, 438
(6th Cir. 2001) (“A prior Fed.R.Civ.P. 12(b)(6) dismissal for failure to state a claim upon which
relief may be granted operates as an adjudication on the merits for issue and claim preclusion
purposes.”)). In the First Action, Judge Boyko issued a valid, final judgment on the merits when
he granted Navient’s Motion to Dismiss with prejudice. Marek, 2017 U.S. Dist. LEXIS 868, at
*4. Therefore, the first element of claim preclusion is met.
The First and Second Actions involve the same parties.
The second element of claim preclusion requires that the parties of both actions be the
same or be in privity. Here, there is no dispute that the parties are the same. Marek is the plaintiff
and Navient is the defendant in both actions. Compl. at 1; First Compl. at 1. Therefore, the
second element of claim preclusion is met.
The Second Complaint asserts only claims that were raised or that could
have been raised in the First Action.
The third element of claim preclusion requires that the subsequent action assert only
“claims that were or could have been litigated in the first action.” Hapgood, 127 F.3d at 493.
However, there is a declaratory judgments exception to the “could have been litigated” prong of
the third element: “‘Unlike other judgments, however, ‘a declaratory judgment determines only
what it actually decides and does not preclude other claims that might have been advanced.’
Consequently, ‘[f]or a previous declaratory judgment, res judicata precludes only claims that
were actually decided.’” State ex rel. Coles v. Granville, 877 N.E.2d 968, 975 (Ohio 2007)
(alteration in original) (citations omitted).
Here, the Second Complaint raised many of the same issues as the First Complaint.
Compare Compl. ¶¶ 5–8, with First Compl. ¶¶ 4–10. But, in the Second Action, Marek included
a new claim. Specifically, the First Action only included a claim for declaratory judgment (which
was construed as a breach of contract claim). However, Marek states that the Second Action is
“for fraud, and unfair, deceptive or abusive acts and practices under the Fair Debt Collection
Practices Act (FDCPA), 15 U.S.C. Section 1692 et seq., engaged in by Navient as a student loan
servicer and collector.” Compl. ¶ 1. Though this claim was first raised in the Second Complaint,
Marek has not advanced any reason why it could not have been included in the First Action, and
the Court sees none. See Fed. R. Civ. P. 18(a) (“A party asserting a claim . . . may join, as
independent or alternative claims, as many claims as it has against an opposing party.”). Thus,
absent an exception, the Second Complaint meets the requirements of the third element of claim
In his Opposition, Marek contended that the declaratory judgment exception applies to his
Second Action. See Opp’n 2 (quoting 50 C.J.S. Judgments § 944). Indeed, Marek did declare in
his First Complaint that his action was “for declaratory judgment pursuant to Fed. R. Civ. P. 57
and 28 U.S.C.A. Section 2201, 2202, for the purpose of determining a question of actual
controversy.” First Compl. ¶ 1(emphasis added). However, requesting and receiving a declaratory
judgment are not the same. Here, this exception does not apply because Judge Boyko did not
issue a declaratory judgment as a remedy in the First Action, rather he dismissed the case for
failure to state a claim. See Marek, 2017 U.S. Dist. LEXIS 868. See generally State ex rel.
Arcadia Acres v. Ohio Dep't of Job & Family Servs., 914 N.E.2d 170 (Ohio 2009) (upholding res
judicata dismissal based on the prior dismissal of a declaratory judgment action).
The third element of claim preclusion is met.
The Second Action involves the same transaction and occurrence as the First
The fourth element of claim preclusion requires that both actions involve the same
transaction or occurrence.
The Court has carefully reviewed both Complaints, and it is clear that the Second
Complaint asserts no new relevant facts or circumstance that might differentiate it from the First
Action. For example, the First Complaint and Second Complaint concern the same PLUS loans
that Marek has with Navient. Compare Compl. ¶¶ 5–8, with First Compl. ¶¶ 4–10. Both
Complaints also concern Marek’s ISRP application and the response letters from Navient.
Compare Compl. exs. A–C, with First Compl. exs. A–C. Finally, in both Complaints, Marek
takes issue with the amount Navient required him to pay on his ISRP. Compare Compl. ¶¶
22–25, with First Compl. ¶¶ 18–20. These Complaints involve the same transaction and
Because all four elements of claim preclusion are met, Marek’s Second Action is barred
and the Court must dismiss Marek’s Complaint. Furthermore, as the Complaint cannot be fixed
to state a claim not so barred, the Complaint is dismissed with prejudice.
E. Failure to State a Claim
Because the Second Action must be dismissed on the basis of claim preclusion, the Court
need not address Navient’s arguments that Marek fails to state a claim under the FDCPA and
fails to plead fraud with particularity. However, for the sake of completeness, the Court will
briefly discuss both of these arguments.
Marek does not allege a valid FDCPA claim.
Under the FDCPA, “[a] debt collector may not use unfair or unconscionable means to
collect or attempt to collect any debt.” 15 U.S.C. § 1692f.
The term “debt collector” means any person who uses any instrumentality of
interstate commerce or the mails in any business the principal purpose of
which is the collection of any debts, or who regularly collects or attempts to
collect, directly or indirectly, debts owed or due or asserted to be owed or due
another. The term does not include . . . . (F) any person collecting or
attempting to collect any debt owed or due or asserted to be owed or due
another to the extent such activity . . . (iii) concerns a debt which was not in
default at the time it was obtained by such person.
15 U.S.C. § 1692a(6); see Corbett v. Beneficial Ohio, Inc., 847 F. Supp. 2d 1019, 1029–30 (S.D.
Ohio 2012) (discussing the default requirement for debt collectors). Here, Marek does not allege
that his loans are or were in default, and certainly he does not allege they were in default at the
time the loan was obtained by Navient. Accordingly, Navient is not a “debt collector” within the
meaning of the FDCPA, and this claim fails.
In opposition, Marek only points out that the Consumer Financial Protection Bureau has
sued Navient for wrongdoing similar to what Marek alleges. Opp’n 2; see Compl. ¶ 1, Consumer
Financial Protection Bureau v. Navient Corp., Case No. 3:17-cv-00101-RDM (M.D. Pa. Jan. 18,
2017) (alleging “unlawful acts and practices in connection with Defendants’ servicing and
collection of student loans.”). However, such a suit in no way supports how this claim by this
plaintiff meets the statutory requirements for a claim pursuant to the FDCPA. Accordingly,
dismissal of the FDCPA claim is also appropriate for failure to state a claim.
Marek has not pled fraud with particularity.
The elements of a claim of fraud under Ohio law are
(a) a representation or, where there is a duty to disclose, concealment of a
fact, (b) which is material to the transaction at hand, (c) made falsely, with
knowledge of its falsity, or with such utter disregard and recklessness as to
whether it is true or false that knowledge may be inferred, (d) with the intent
of misleading another into relying upon it, (e) justifiable reliance upon the
representation or concealment, and (f) a resulting injury proximately caused
by the reliance.
Gaines v. Preterm-Cleveland, Inc., 514 N.E.2d 709, 712 (1987). Importantly, under Fed. R. Civ.
P. 9(b), there is a heightened pleading requirement for actions sounding in fraud: “a party must
state with particularity the circumstances constituting fraud or mistake.” This includes identifying
the “who, what, when, where, and how” of the alleged fraud. Bondali v. Yum! Brands, Inc., 620
Fed. App’x 483, 488–89 (6th Cir. 2015) (citing Sanderson v. HCA-The Healthcare Co., 447 F.3d
873, 877 (6th Cir. 2006)).
Navient argues that the the Complaint is “bereft of any details” and “does nothing more
than label alleged conduct by [Navient] as ‘fraud,’ without identifying specific misrepresentation
by Navient, much less specific facts . . . .” Mot. to Dismiss 7. Navient is partially correct. The
Complaint does allege some relevant facts. For instance, the Complaint alleges that Marek was
misleadingly steered by Navient into forbearance instead of U.S. Department of Education
programs for which he was eligible, to his detriment and Navient’s benefit, over a span of years.
Compl. ¶ 12, 15, 16. Marek also attaches to his complaint two contradictory letters from Navient
contemporaneously both denying his application for an ISRP and granting his
application—although requiring him to pay approximately 72% of his stated income as opposed
to the 20% he had requested. Compl. ¶ 19, exs. B, C. However, while Marek does allege limited
facts, these facts are insufficient under the heightened pleading standard of Rule 9 to establish the
“who, what, when, where, and how” of the alleged fraud with particularity. According, dismissal,
albeit without prejudice, is also appropriate on this basis. Boroff v. Alza Corp., 685 F. Supp. 2d
704, 711 (N.D. Ohio 2010) (citing Bledsoe, 342 F.3d 634) (“The failure to properly plead fraud is
not grounds for dismissal with prejudice.”).
For the reasons stated herein, Defendants’ Motion to Dismiss, Doc. #: 4, is GRANTED,
and the above-captioned case is dismissed with prejudice on the basis of claim preclusion.
IT IS SO ORDERED.
/s/ Dan A. Polster July 6, 2017
DAN AARON POLSTER
UNITED STATES DISTRICT JUDGE
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