United States of America v. Marable
Filing
21
OPINION AND ORDER granting 12 Motion for Summary Judgment. Signed by Magistrate Judge Norah McCann King on 3/21/2014. (pes1)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
UNITED STATE OF AMERICA,
Plaintiff,
vs.
Civil Action 2:12-cv-754
Magistrate Judge King
JEFFREY MARABLE, MD,
Defendant.
OPINION AND ORDER
This matter is before the Court, with the consent of the parties
pursuant to 28 U.S.C. § 636(c), upon Plaintiff United States of
America’s Motion for Summary Judgment (“Plaintiff’s Motion for Summary
Judgment”), Doc. No. 12, the response of defendant Jeffrey Marable,
M.D., Defendant’s Memorandum in Opposition to Plaintiff’s Motion for
Summary Judgment (“Defendant’s Response”), Doc. No. 13, and
plaintiff’s reply, Plaintiff United States of America’s Reply to Its
Motion for Summary Judgment (“Plaintiff’s Reply”), Doc. No. 14.
For
the reasons that follow, Plaintiff’s Motion for Summary Judgment is
GRANTED.
I.
Background
Defendant attended medical school from 1986 to 1990 and took out
various loans, including Government-insured Health Education
Assistance Loans (“HEAL”) to pay for his schooling.
Affidavit of
Jeffrey Marable, M.D. (“Marable Affidavit”), attached to Defendant’s
Response as Exhibit A, at ¶¶ 3-4.
On February 21, 1995, defendant
executed a Sallie Mae HEAL Relief Promissory Note in the principal
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amount of $94,566.33 (the “HEAL Note”) to consolidate six education
loans under the Federal HEAL Consolidation Program.
See Complaint,
Doc. No. 2, ¶ 3, Exhibit A; Answer, Doc. No. 6, ¶ 3.
Defendant made payments on the HEAL Note until January 5, 2005,
at which time he filed a petition for bankruptcy relief under Chapter
13 of the Bankruptcy Code.
Marable Affidavit, ¶ 6.
Sallie Mae filed
a Proof of Claim in the amount of $75,774.34 in connection with a
student loan or loans.
Id. at ¶¶ 7-8; Proof of Claim, attached to
Defendant’s Response as Exhibit A-2.
Defendant’s bankruptcy was
discharged on May 24, 2010 but the HEAL Note was not discharged in the
bankruptcy.
Certificate of Indebtedness, attached to Complaint as
Exhibit B, at pp. 1-2.
Due to the bankruptcy, Sallie Mae filed an insurance claim with
the Department of Health and Human Services (“HHS”) in the amount of
$75,891.
Id.
Sallie Mae’s claim was paid on February 10, 2005 and
the HEAL Note was assigned to HHS.
Id.
HHS notified defendant by
letter dated February 18, 2005 that Sallie Mae had submitted an
insurance claim and had assigned the HEAL Note to the United States
Government.
Id.
In a letter dated May 25, 2010, HHS provided defendant with
instructions for entering into a repayment agreement.
Id.
In a
letter dated January 21, 2011, HHS notified defendant that, unless
defendant submitted a written response, repayment agreement, or
payment in full within sixty days, HHS would refer the HEAL Note to
other federal agencies for the purpose of administrative offset under
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the Debt Collection Improvement Act of 1996.
Id.
In a letter dated
January 29, 2011, HHS notified defendant that the HEAL Note had been
referred for collection and advised defendant that, unless he remitted
payment in full or entered into a repayment agreement, the HEAL Note
would be referred to the United States Department of Justice (“DOJ”).
Id.
Defendant was again notified on April 25, 2012 that the HEAL Note
would be referred to the DOJ unless he entered into a repayment
agreement within sixty days.
of these requests.
Id.
Defendant did not comply with any
Id.
Plaintiff United States of America filed this action on August
20, 2012, on behalf of HHS, seeking recovery of principal and interest
allegedly due on the HEAL Note.
Plaintiff now seeks an order granting
it summary judgment in the amount of $108,860.04, that amount
reflecting $107,597.97 in principal and $1,262.07 in interest accrued
through June 27, 2012, plus additional interest on the principal
balance from June 27, 2012 to the date of judgment at the rate of
3.125 percent per annum.
Plaintiff’s Motion for Summary Judgment, p.
4.
II.
Standard
The standard for summary judgment is well established.
This
standard is found in Rule 56 of the Federal Rules of Civil Procedure,
which provides in pertinent part: “The court shall grant summary
judgment if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter
of law.”
Fed. R. Civ. P. 56(a).
Pursuant to Rule 56(a), summary
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judgment is appropriate if “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of
law.”
Id.
In making this determination, the evidence “must be viewed
in the light most favorable” to the non-moving party.
Kress & Co., 398 U.S. 144, 157 (1970).
Adickes v. S.H.
Summary judgment will not lie
if the dispute about a material fact is genuine, “that is, if the
evidence is such that a reasonable jury could return a verdict for the
non-moving party.”
(1986).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
However, summary judgment is appropriate if the opposing
party “fails to make a showing sufficient to establish the existence
of an element essential to that party’s case, and on which that party
will bear the burden of proof at trial.”
477 U.S. 317, 322 (1986).
Celotex Corp. v. Catrett,
The “mere existence of a scintilla of
evidence in support of the [opposing party’s] position will be
insufficient; there must be evidence on which the jury could
reasonably find for the [opposing party].”
Anderson, 477 U.S. at 252.
The “party seeking summary judgment always bears the initial
responsibility of informing the district court of the basis for its
motion, and identifying those portions” of the record which
demonstrate “the absence of a genuine issue of material fact.”
Celotex Corp., 477 U.S. at 323.
The burden then shifts to the
nonmoving party who “must set forth specific facts showing that there
is a genuine issue for trial.”
Fed. R. Civ. P. 56(e)).
Anderson, 477 U.S. at 250 (quoting
“Once the moving party has proved that no
material facts exist, the non-moving party must do more than raise a
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metaphysical or conjectural doubt about issues requiring resolution at
trial.”
Agristor Fin. Corp. v. Van Sickle, 967 F.2d 233, 236 (6th
Cir. 1992) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986)).
III. Discussion
The Government filed this action to recover amounts allegedly due
on the HEAL Note.
To recover on a promissory note, the Government
must “make a prima facie showing that “(1) the defendant signed it,
(2) the government is the present owner or holder and (3) the note is
in default.”
United States v. Petroff-Kline, 557 F.3d 285, 290 (6th
Cir. 2009) (citing United States v. MacDonald, No. 93-1924, 1994 WL
194248, at *2 (6th Cir. May 16, 1994)).
“For that purpose the
government may introduce evidence of the note and a sworn transcript
of the account or certificate of indebtedness.”
Id. (citing United
States v. Davis, 28 F. App’x 502, 503 (6th Cir. 2002)).
“Once such a
prima facie case is established, defendant has the burden of proving
the nonexistence, extinguishment or variance in payment of the
obligation.”
Id. (citing Davis, 28 F. App’x at 503).
In the case presently before the Court, the Government has
established a prima facie case by attaching to the Complaint a copy of
the HEAL Note signed by defendant and a Certificate of Indebtedness
signed under penalty of perjury by Barry Blum, the Chief of the
Referral Control Section of the Debt Management Branch of HHS.
Certificate of Indebtedness provides, inter alia, that HHS was
assigned the HEAL Note from Sallie Mae in February 2005, that
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The
defendant has not entered into a repayment agreement with HHS since
the HEAL Note was assigned, and that HHS has declared the entire HEAL
Note due and payable because of defendant’s “lack of cooperation” in
“establishing an acceptable repayment schedule.”
Indebtedness, pp. 1-2.
See Certificate of
According to the Certificate of Indebtedness,
the total debt due on the HEAL Note as of June 26, 2012 is
$108,860.04, consisting of $107,597.87 in principal and $1,262.07 in
interest.
Id.
Because the Government has established its prima facie case, the
burden shifts to defendant to “prov[e] the nonexistence,
extinguishment or variance in payment of the obligation.”
Kline, 557 F.3d at 290.
Petroff-
Defendant admits that he signed the HEAL
Note, Complaint, Doc. No. 2, ¶ 3, Exhibit A; Answer, Doc. No. 6, ¶ 3,
and he does not contest that the Government is the present holder of
the HEAL Note.
Instead, defendant argues that there is a genuine
issue of material fact as to whether he is in default and, if found to
be in default, what amount is due under the HEAL Note.
Defendant avers that, after the 2010 “bankruptcy discharge, [he]
received monthly statements from Sallie Mae on the [HEAL] Loan, and
made payments according to the statements.”
Marable Affidavit, ¶ 9.
Defendant also avers that Sallie Mae placed the Loan in forbearance in
March 2011 and that it remains in forbearance.
Id. at ¶¶ 11-12.
In
further support of his position, defendant has submitted the
transaction history for a Sallie Mae account that details payment and
capitalized interest transactions from June 1990 through December 2012
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(the “Sallie Mae Statement”).1
Defendant’s Response, Exhibit A-1.
Defendant has also submitted a statement from HHS detailing activity
on the HEAL Note from July 1995 through June 2012 (the “HHS
Statement”).
Id. at Exhibit B-1.
As defendant argues, the Sallie Mae Statement and the HHS
Statement reflect nearly identical payments from 1995 through January
2005.
The statements differ after January 2005.
The HHS Statement
reflects that defendant last made a payment on January 18, 2005 and
that two “lender refund payments” were made in March 2005.
1, 26.
Id. at pp.
The Sallie Mae Statement reflects that defendant made four
additional payments in 2005 and seven payments between September 2010
and March 2011, at which time interest began to capitalize on the loan
quarterly.
Defendant’s Response, Exhibit A-1, pp. 2-3.
Defendant
avers that the additional payments reflected in the Sallie Mae
Statement were made on the HEAL Note and paid to Sallie Mae.
Marable
Affidavit, ¶ 9.
Defendant’s affidavit and the Sallie Mae Statement are
insufficient to show that there is a disputed issue of fact with
regard to the “nonexistence, extinguishment or variance in payment of
the obligation.”
See Petroff-Kline, 557 F.3d at 290.
Defendant has
provided evidence that he made payments on a loan to Sallie Mae after
his 2010 bankruptcy discharge.
However, Sallie Mae assigned the HEAL
Note to HHS on February 10, 2005 and notified defendant by letter
1
The Sallie Mae Statement provides, inter alia, the amount of each payment
that was applied to principal, but it does not indicate the original or
outstanding principal balance of the account.
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dated February 18, 2005 that Sallie Mae had submitted an insurance
claim and had assigned the HEAL Note to the United States Government.
Certificate of Indebtedness, pp. 1-2.
There is no evidence that
defendant made any payments to HHS on the HEAL Note after the February
2005 assignment or that defendant did not receive notice of the
assignment.2
Defendant also avers that Sallie Mae placed the HEAL Note in
forbearance in March 2011 and that, as of April 18, 2013, it remains
in forbearance.
Marable Affidavit, ¶¶ 11-12.
In support of this
assertion, defendant has provided a Sallie Mae statement, dated March
1, 2013, indicating that a loan with a principal balance of $60,331.12
is in forbearance status.
Defendant’s Response, Exhibit A-3.
It is
clear to this Court, however, that the loan referred to in the March
1, 2013 Sallie Mae statement is not the HEAL Note.
First, the origination date and original loan amount of the loan
referred to in the March 1, 2013 Sallie Mae statement differs from
that of the HEAL Note.
Significantly, the March 1, 2013 Sallie Mae
statement provided by defendant does not include the loan account
number or the second page of the statement, which would include the
“loan level breakdown of the” totals listed on the first page.
2
On the
Defendant avers that he “never received a statement from the United States
Department of Health and Human Services.” Marable Affidavit, ¶ 10. However,
that averment is insufficient to create a genuine issue of material fact as
to whether defendant received notice of the assignment. It is clear from
defendant’s affidavit that the “statement” he is referring to is a monthly
billing statement and not a letter notifying him of the assignment. See id.
at ¶¶ 9 (“After my bankruptcy discharge, I received monthly statements from
Sallie Mae on the [HEAL] Loan, and made payments according to the
statements.”), 10 (“I have never received a statement from [the] United
States Department of Health and Human Services.”).
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other hand, the Government has provided a Sallie Mae statement, dated
September 2, 2012, for what appears to be the same loan addressed in
the March 1, 2013 Sallie Mae statement provided by defendant.3
The
second page of that statement indicates that the loan originated on
September 8, 1994 in the amount of $63,207.05.
Exhibit C.
Plaintiff’s Reply,
The HEAL Note, however, originated in February 1995 in the
amount of $94,566.33.
See Complaint, Doc. No. 2, ¶ 3, Exhibit A;
Answer, Doc. No. 6, ¶ 3.
Second, the principal balance of $60,331.12 listed on the March
1, 2013 Sallie Mae statement provided by defendant differs
significantly from that of the HEAL Note.
Sallie Mae’s January 24,
2005 Proof of Claim relating to the HEAL Note, filed in defendant’s
original bankruptcy proceeding, was in the amount of $75,774.34.
Marable Affidavit, ¶¶ 7-8; Proof of Claim, attached to Defendant’s
Response as Exhibit A-2.
The sum of the payments and capitalized
interest transactions that defendant represents occurred between
January 2005 and December 2012, i.e., the transactions reflected on
the Sallie Mae Statement, would result in a net increase in the
principal amount of the HEAL Note since January 2005.
However,
defendant now argues that a loan with a principal balance of less than
3
The Court’s own review of the September 2, 2012 statement provided by the
Government, the March 1, 2013 statement provided by defendant, and the Sallie
Mae Statement confirms that the statement provided by the Government is for
the same loan represented in the March 1, 2013 statement provided by
defendant. The outstanding balance on the March 1, 2013 statement is
$60,331.12. That total, reduced by the interest capitalized on the Sallie
Mae Statement on September 30, 2012 ($1,307.56), October 29, 2012 ($421.51),
and December 31, 2012 ($922.24), would result in a total of $57,679.81. That
figure is the principal balance as of September 2, 2012 listed on the
statement provided by the Government.
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eighty percent of the amount of the January 2005 Proof of Claim is the
HEAL Note.
This cannot be.
Finally, Sallie Mae assigned the HEAL Note to HHS on February 10,
2005.
Certificate of Indebtedness, at pp. 1-2.
Because it no longer
owned or held the HEAL Note, Sallie Mae could not legally place the
note in forbearance in March 2011, as defendant contends.
See Marable
Affidavit, ¶¶ 11-12.
Considering the discrepancies in the outstanding principal
balances, origination dates, and original loan amounts, and the fact
that Sallie Mae did not own or hold the HEAL Note at the time
defendant contends Sallie Mae placed it in forbearance, a reasonable
jury could not find that the March 1, 2013 Sallie Mae statement, and
thus, defendant’s related averments, see Marable Affidavit, ¶¶ 11-12
(referencing the March 1, 2013 Sallie Mae statement), are evidence
that the HEAL Note is in forbearance.
Defendant also contests the amount due on the HEAL Note.
Defendant’s Response, pp. 4-5.
See
Defendant argues that the principal
balance of the HEAL Note represented in the Certificate of
Indebtedness is incorrect because it is higher than the original loan
amount in 1995, even though defendant made $82,011.43 in payments
between 1995 and 2005.
Id.
In support of this argument, defendant
again refers to the March 1, 2013 Sallie Mae statement, which shows a
loan balance of $60,331.12.
Id.
As discussed supra, defendant has offered no evidence that he
made payments on the HEAL Note to HHS after the February 2005
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assignment, and the March 1, 2013 Sallie Mae statement upon which
defendant relies reflects the balance due on a note other than the
HEAL Note.
Although defendant argues that the HEAL Note has an
outstanding amount less than the $108,860.04 reflected in the
Certificate of Indebtedness, defendant has offered no evidence of
payment by him on the HEAL Note that was not properly credited, nor
has he presented evidence of error in the Certificate of Indebtedness.
Accordingly, the Court concludes that plaintiff has established a
prima facie case to recover on the HEAL Note and that defendant has
failed to create a genuine issue of material fact as to “the
nonexistence, extinguishment or variance in payment of the
obligation.”
See Petroff-Kline, 557 F.3d at 290.
Plaintiff is
therefore entitled to summary judgment as a matter of law.
Plaintiff’s Motion for Summary Judgement, Doc. No. 12, is
therefore GRANTED.
Plaintiff is AWARDED damages consisting of $107,597.97 in
principal and $1,262.07 in interest accrued through June 27, 2012, and
$5,812.87 in additional interest on the principal balance from June
27, 2012 to the date of judgment at the rate of 3.125 percent per
annum,4 for a total award of $114,672.91.
The Clerk shall enter FINAL JUDGMENT accordingly.
March 21, 2014
s/Norah McCann King_______
Norah McCann King
United States Magistrate Judge
4
$107,597.97 * 3.125% * 631 (the number of days from June 28, 2012 through
March 21, 2014) ÷ 365 = $5,812.87.
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