United States of America v. Marable
Filing
26
ORDER denying 23 Objection to Magistrate Judge Order. Signed by Magistrate Judge Norah McCann King on 7/15/14. (jr1)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
vs.
Civil Action 2:12-cv-754
Magistrate Judge King
JEFFREY MARABLE, MD,
Defendant.
OPINION AND ORDER
This is an action to recover on a government insured Health
Education Assistance Loan (“HEAL”) allegedly executed by Defendant
Jeffrey Marable, M.D.
See Complaint, Doc. No. 2, (attaching as
Exhibits A and B a copy of the HEAL Note and a Certificate of
Indebtedness).
On March 21, 2014, this Court granted Plaintiff’s
motion for summary judgment in the amount of $114,672.91.
Opinion and
Order, Doc. No. 21; Clerk’s Judgment, Doc. No. 22.1 This matter is now
before the Court on Defendant Jeffrey Marable’s Objections to
Magistrate’s [sic] Opinion and Order Dated March 21, 2014
(“Defendant’s Motion”), Doc. No. 23, which the Court has received as a
motion to alter or amend judgment pursuant to Fed. R. Civ. P. 59(e).
See Order, Doc. No. 24. For the reasons that follow, Defendant’s
Motion is DENIED.
I. BACKGROUND
Between 1986 and 1990, Defendant took out various loans,
including HEAL loans from private lender Sallie Mae, to finance his
1
The parties consented to disposition of the case by the undersigned pursuant
to 28 U.S.C. § 636(c).
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medical schooling. Defendant consolidated six loans on February 21,
1995, pursuant to the Federal HEAL Consolidation Program by executing
a Sallie Mae HEAL Relief Promissory Note in the principal amount of
$94,566.33 (“the HEAL Note”). Bankruptcy Documents, p. 3, attached to
Plaintiff United States of America’s Reply to Its Motion for Summary
Judgment (“Plaintiff’s MSJ Reply”), Doc. No. 14-2. Defendant made
payments on the HEAL Note until he filed a petition under Chapter 13
of the Bankruptcy Code on January 5, 2005. Affidavit of Jeffrey
Marable, M.D. (“Marable Affidavit”), ¶ 5, attached to Defendant’s
Memorandum in Opposition to Plaintiff’s Motion for Summary Judgment
(“Defendant’s MSJ Memo in Opp.”), Doc. No. 13-1. Sallie Mae filed a
proof of claim in that action in the amount of $75,774.34 in
connection with a student loan or loans. Bankruptcy Documents, p.1,
attached to Plaintiff’s MSJ Reply, Doc. No. 14-2.
The Educational
Credit Management Corporation (“ECMC”), a servicer for Sallie Mae
loans, filed a separate proof of claim in the bankruptcy action in
connection with a different student loan in the amount of $45,093.57.
Id. at 3 et seq. The Schedule F in Defendant’s bankruptcy proceedings
reflects claims by or on behalf of Sallie Mae in the total amount of
“$121,243.55” in connection with student loans. Id. at 7.
Sallie Mae filed a claim with the Department of Health and Human
Services (“HHS”) in the amount of $75,891.00 after Defendant filed for
bankruptcy protection. Certificate of Indebtedness, pp. 1-2, attached
as Exhibit B to Complaint. HHS paid that claim on February 10, 2005,
and the HEAL Note was assigned to HHS. Id. HHS advised Defendant of
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the assignment and attempted, without success, to work out a repayment
schedule. Id. at 2-3.
As noted supra, this Court granted summary judgment to Plaintiff
in the total amount of $114,672.91.
In Defendant’s Motion, Defendant argues that there remains a
genuine dispute of material fact as to (1) whether Defendant defaulted
on the HEAL Note, and (2) the amount of damages, even assuming that he
did. Defendant’s Motion, pp. 3-4. Thus, according to Defendant, the
judgment should be vacated and the action should proceed to a trial on
the merits. Id. at 5.
Plaintiff opposes Defendant’s Motion, taking the position that
Defendant has failed to allege a clear error of law. Plaintiff United
States of America’s Response in Opposition to Motion to Alter or Amend
Judgment (“Plaintiff’s Response”), p. 1, Doc. No. 25.
II. STANDARD
A court may alter or amend a judgment pursuant to Fed. R. Civ. P.
59(e) only if there is “(1) a clear error of law; (2) newly discovered
evidence; (3) an intervening change in controlling law; or (4) a need
to prevent manifest injustice.” Intera Corp. v. Henderson, 428 F.3d
605, 620 (6th Cir. 2005)(citing GenCorp, Inc. v. Am. Int’l
Underwriters, 178 F.3d 804, 834 (6th Cir. 1999)). A district court has
“considerable discretion” in deciding whether to grant a Rule 59(e)
motion. Leisure Caviar, LLC v. U.S. Fish and Wildlife Service, 616
F.3d 612, 615 (6th Cir. 2010).
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III. ANALYSIS
As discussed supra, Plaintiff seeks to recover on a HEAL
promissory note. To establish a prima facie case to recover on a
promissory note, the government must show 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)). If the government
establishes a prima facie case, then the defendant debtor “has the
burden of proving the nonexistence, extinguishment or variance in
payment of the obligation.” Id. (citing United States v. Davis, No.
00-1985, 28 F. App’x 502, 503 (6th Cir. Jan. 31, 2002)).
In granting summary judgment in this case, the Court determined
that Plaintiff had established a prima facie case and that Defendant
had “failed to create a genuine issue of material fact as to the
‘nonexistence, extinguishment or variance in payment of the
obligation.’” Opinion and Order, Doc. No. 21, p. 11 (citing PetroffKline, 557 F.3d at 290). The Plaintiff established a prima facie case
by providing a copy of the signed HEAL Note and the Certificate of
Indebtedness, which establish that the Defendant signed the HEAL Note,
that the Government is the present owner of the HEAL Note, and that
the HEAL Note is in default. Id. at 5; see Petroff-Kline, 557 F.3d at
290.
In seeking to alter or amend the judgment entered in this action,
Defendant offers no newly discovered evidence or change in controlling
law, nor does he point to a need to prevent manifest injustice.
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Instead, Defendant argues that, in granting summary judgment, the
Court committed an error of law. Defendant’s Motion.
Defendant argues, first, that the Court erred in concluding that
Defendant is in default under the HEAL Note. In this regard, Defendant
insists that all of his student loans were consolidated into the HEAL
Note, which was then placed in forebearance by Sallie Mae in 2011.
Defendant’s Motion, p. 2; Marable Affidavit, ¶¶ 5, 11.
Plaintiff
responds that the loan in forbearance to which Defendant refers is an
entirely different loan that was not included in the HEAL Note.
Plaintiff’s Response, p. 2. Noting that Sallie Mae was paid $75,891.00
for its claim in connection with the HEAL Note on February 10, 2005,
and then assigned the HEAL Note to the Plaintiff, Plaintiff also
argues that Sallie Mae could not have granted forbearance on
Defendant’s HEAL Note in 2011 because Sallie Mae no longer owned or
serviced that loan as of February 10, 2005. Id.
Plaintiff’s arguments are well taken and Defendant’s assertion
in his affidavit that all of his student loans were consolidated in
the HEAL Note does not create a genuine issue of material fact. As
this Court concluded in its grant of summary judgment, a reasonable
jury could not conclude that the HEAL Note includes the note currently
in forbearance in light of “discrepancies in the outstanding principal
balances, origination dates, and original loan amounts.” Opinion and
Order, p. 10.
The note in forbearance originated on September 8, 1994.
Letter
to Defendant from Sallie Mae, p. 3, attached to Plaintiff’s MSJ Reply,
Doc. No. 14-1. The HEAL Note at issue in this case does not include a
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loan that originated in 1994.
Compare id. with Exhibit A, p. 3,
attached to Complaint. Moreover, Defendant is simply wrong when he
asserts that “Sallie Mae filed a proof of claim in the bankruptcy in
the amount of $75,774.34 . . .[and no] other claims were filed in the
bankruptcy on behalf of student loan creditors.”
p. 2.
Defendant’s Motion,
Although Sallie Mae filed a proof of claim in the amount of
$75,774.34 in the bankruptcy proceeding, Bankruptcy Documents, p. 1,
Doc. No. 14-2, the record establishes that ECMC, a Sallie Mae
servicer, also filed a proof of claim relating to a student loan and
the Schedule F filed in the bankruptcy action reflects claims by or on
behalf of Sallie Mae in the total amount of “$121,243.55.”
Id. pp. 3,
7. The record therefore establishes that the HEAL Note does not
include every student loan on which Defendant is obligated.
Furthermore, and as Plaintiff notes, the HEAL Note was assigned
to Plaintiff following its payment of Sallie Mae’s claim in connection
with that loan in 2005. Therefore, Sallie Mae no longer owned the HEAL
Note and could not have effectively placed it in forbearance in 2011.
After again reviewing the record and the arguments of the
parties, this Court again concludes that a reasonable jury could not
find that the Sallie Mae loan in forbearance is the HEAL Note at issue
in this action. The loan in forbearance was not included in the HEAL
Note, the two loans have different origination dates, and Sallie Mae
has not owned or serviced the HEAL Note since February 10, 2005. As it
relates to this argument, Defendant’s Motion is without merit.
Defendant also argues in Defendant’s Motion that there is a
genuine dispute of material fact as to the amount due on the HEAL
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Note, even assuming Defendant’s default. Defendant’s Motion, p. 4.
Specifically, Defendant points to Sallie Mae’s proof of claim in
Defendant’s bankruptcy proceeding in the amount of $75,774.34 and to
the principal balance of $108,860.04 in the Certificate of
Indebtedness filed in this action. Id. Defendant sees an issue for
trial in the fact that “at the time of Dr. Marable’s bankruptcy
Plaintiff was claiming a balance of $75,774.34; yet, years later
Plaintiff claims that the principal balance increased.”
Id. (emphasis
in the original).
In response, Plaintiff takes the position that the increase in
the principal amount due is explained by the fact that interest on the
HEAL Note has been compounded annually. Plaintiff’s Response, p. 3.
Plaintiff’s arguments are again well taken. Defendant does not
claim credit for any payments by him on the HEAL Note since his
bankruptcy proceedings, nor does he allege error in the calculations
reflected in the Certificate of Indebtedness. The principal balance on
the HEAL Note therefore properly increased by the compounded interest
each year. As it relates to this argument, Defendant’s Motion is
likewise without merit.
In short, Defendant has failed to establish a clear error of law
in the grant of summary judgment in favor of Plaintiff. Defendant has
failed to establish a genuine dispute of material fact as to the
“‘nonexistence, extinguishment or variance in payment of the
obligation.’” Opinion and Order, p. 11 (citing Petroff-Kline, 557 F.3d
at 290).
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Defendant Jeffrey Marable’s Objections to Magistrate’s [sic]
Opinion and Order Dated March 21, 2014, Doc. No. 23, is therefore
DENIED.
s/ Norah McCann King
Norah McCann King
United States Magistrate Judge
July 15, 2014
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