Opinion
Civ. No. H-98-1389.
June 30, 1999.
MEMORANDUM OPINION
In this civil action, the United States of America seeks to recover the balance allegedly due on a student loan. Named as the defendant is Alexander E. Birman ("Birman"), who, on August 15, 1979, executed a promissory note to secure a guaranteed student loan in the principal amount of $5,000.
Birman at the time was a student attending the University of Pittsburgh.
Certain payments have been made by Birman on the loan, and the government is here claiming that there remains due principal in the amount of $2,829.14, together with interest and penalties. In this civil action, the government is seeking the entry of a judgment against defendant Birman in the amount of $5,035.61, together with prejudgment interest at the rate of 7% from April 21, 1999 until the date of the entry of the judgment.
Represented by counsel, defendant Birman has filed an answer to the complaint and has asserted numerous affirmative defenses.
In his answer, plaintiff has asserted affirmative defenses of estoppel, statute of limitations, unclean hands, laches, accord and satisfaction, contributory negligence, payment, release, waiver and statute of frauds.
Pursuant to a Scheduling Order entered by the Court, there has been some discovery undertaken in the case. On April 20, 1999, defendant filed a motion for summary judgment pursuant to Rule 56, F.R.Civ.P. Plaintiff thereafter filed a cross motion for summary judgment. Memoranda and numerous exhibits in support of and in opposition to these pending motions have been filed by the parties. Following its review of the pleadings, memoranda and exhibits, the Court has concluded that no hearing is necessary for a decision on the two pending motions. See Local Rule 105.6. For the reasons stated herein, defendant's motion for summary judgment will be denied, and plaintiff's cross motion for summary judgment will be granted. Judgment will accordingly be entered in favor of the United States of America in the amount claimed, including prejudgment interest and costs.
I Background Facts
Defendant Birman does not dispute the fact that in 1979 he received a student loan in the amount of $5,000 and that, on August 15, 1979, he executed a promissory note agreeing to repay the principal amount of $5,000 plus interest at 7% per annum and costs. According to the government, Birman, after making certain payments which were applied to the loan, defaulted on his financial obligation in 1985. On June 6, 1997, final demand was made by the government for repayment of this loan. When there was no response by defendant to this demand, this civil action was filed in this Court on April 30, 1998.
The loan was made by a private lender and was guaranteed by the government. Upon default, the lender's claim against Birman was assigned to the United States.
Defendant Birman contends that his loan was paid back in full in 1985. However, he has not, in responding to this suit, been able to provide any documentation of the payments made by him on the outstanding balance of the loan. Seeking summary judgment, defendant contends that the government cannot substantiate the amount of his alleged indebtedness and further that the government is barred from any recovery because it has been dilatory in seeking to recover from him any amount due on this student loan. The government in turn relies on evidence of record in contending that it is entitled to the entry of summary judgment in its favor.
II Summary Judgment Principles
It is well established that a party moving for summary judgment bears the burden of showing the absence of any genuine issue of material fact and that it is entitled to judgment or partial summary judgment as a matter of law. Barwick v. Celotex Corp., 736 F.2d 946, 958 (4th Cir. 1984). The movant's burden may be met by consideration of affidavits, exhibits, depositions and other discovery materials. Id. The burden is on the moving party at the summary judgment stage to show that there is an absence of evidence to support the nonmoving party's position.Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
While the facts and all reasonable inferences drawn therefrom must be viewed in the light most favorable to the party opposing the motion, Ross v. Communications Satellite Corp., 759 F.2d 355, 364 (4th Cir. 1985), when the moving party has carried its burden under Rule 56, its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). "`A mere scintilla of evidence is not enough to create a fact issue; there must be evidence on which a jury might rely.'" Barwick, 736 F.2d at 958-59 (quoting Seago v. North Carolina Theaters, Inc., 42 F.R.D. 627, 640 (E.D.N.C. 1966),aff'd, 388 F.2d 987 (4th Cir. 1967), cert. denied, 390 U.S. 959 (1968)). Moreover, only disputed issues of material fact, determined by reference to the applicable substantive law, will preclude the entry of summary judgment. "Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Fourth Circuit has stated that, with regard to motions for summary judgment, the district courts have "an affirmative obligation . . . to prevent `factually unsupported claims and defenses' from proceeding to trial." Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir. 1987) (quoting Catrett, 477 U.S. at 323-24).
Applying these principles to the facts of record here, this Court has concluded that plaintiff's cross motion for summary judgment must be granted and that defendant's motion for summary judgment must be denied.
III Discussion
In a suit on a promissory note, the plaintiff may establish aprima facie case by providing evidence of the executed note and an authenticated transcript showing the amount due on the account.United States v. Irby, 517 F.2d 1042, 1043 (5th Cir. 1975). Once such a prima facie case has been shown, the burden then shifts to the defendant to prove that the amount claimed is not due and owing. Id. In the absence of such proof, summary judgment in favor of the plaintiff is appropriate. Actions to enforce promissory notes are among the most suitable classes of cases for summary judgment disposition, especially when the moving party has shown execution, the amount of the note and the status of the account. FDIC v. Willis, 497 F. Supp. 272, 276 (S.D.Ga. 1980). Once the moving party has made such a showing, the question then before the Court is whether the defendant's affirmative defenses are legally sufficient. Id.
In this case, the government has established a prima facie case. Defendant Birman executed the note, and the authenticated transcript and other documents establish that the amounts claimed are due and owing. Government records disclose that Birman has made no payments on this indebtedness since 1985.
In responding to the government's motion for summary judgment, defendant Birman has failed on this record to meet his burden of showing that the amount claimed by the government is not due and owing. He has merely asserted that in a letter to the Pennsylvania Higher Education Assistance Agency (the "PHEAA") dated October 26, 1987 he stated that "my loan was paid back in full over two years ago." However, mere conclusory claims of payment "without factual basis" are insufficient to defeat a properly documented motion for summary judgment. Foster v. Alexander, 811 F. Supp. 5, 8 (D.D.C. 1993). Pursuant to Rule 56(e), when, as here, a motion for summary judgment has been made and supported, the adverse party may not rest upon mere allegations or denials of assertions in the motion. Rather, the adverse party, by affidavit or otherwise, must set forth "specific facts" showing that there is a genuine issue for trial. Id. In seeking summary judgment and in opposing plaintiff's motion for summary judgment, defendant Birman has not satisfied the burden placed on him in a case of this sort.
In his affidavit, Birman states that he does not have records dating back to the dates when he says he made the payments in question. According to Birman, payments were made to the account by him and by other family members on his behalf. However, he concedes that he does not have payment information to support these assertions. Moreover, he has not explained why, if family members have made payments on his behalf, evidence does not exist showing the dates and amounts of any such payments. Numerous letters were addressed to Birman in 1985 and 1986 by the PHEAA and Pennsylvania's Student Loan Servicing Center advising him that his guaranteed student loan had defaulted. There is no indication in the record here that Birman ever responded to these letters or ever contended in those years that his loan was not in default.
No affidavits of family members have been submitted in support of defendant's assertion that they have made payments on his behalf.
In January of 1990, Leonard Z. Bulman, Esq., an attorney for Birman, requested copies of payment records and other documents showing the balance owed by Birman on this student loan. By letter dated February 14, 1990 from the PHEAA, copies of all such documents were supplied to Birman's attorney. These documents indicated that the principal balance then due on the defaulted loan was $2,829.14 and that interest at the rate of 7% was accruing on the unpaid principal balance. The record here does not disclose that these documents were ever challenged by Birman's attorney or that the figures set forth were disputed in any way.
In his letter of January 11, 1990 to the PHEAA, Mr. Bulman stated that Birman had been unable to locate papers related to this loan.
In his answer, defendant Birman has asserted a veritable laundry list of affirmative defenses. None of them have merit. In particular, defendant contends that the government's claim in this case is barred by the defenses of limitations and laches. However, in advancing such an argument, defendant overlooks Section 3 of the Higher Education Technical Amendments Act (the "HETA"), P.L. 102-36, enacted on April 9, 1991 and codified at 20 U.S.C. § 1091a. This enactment eliminated the bar of any statute of limitations on a suit brought by the government to collect amounts due on a student loan. Foster, 811 F. Supp. at 9.
In his memoranda, counsel for Birman has not cited any cases or other authorities which would support the applicability of any of his affirmative defenses to the facts of this case.
It is quite clear from the language of § 1091a that the claim asserted by the government in this case is not time-barred. It has even been held that the HETA amendments operate retroactively to revive otherwise stale claims. United States v. Glockson, 998 F.2d 896, 897 (11th Cir. 1993); United States v. Hodges, 999 F.2d 341, 342 (8th Cir. 1993). Since Congress has clearly indicated that a suit of this sort should not be barred by the passage of time, the defense of laches, which has also been advanced by defendant, must likewise fail.
IV Conclusion
Inasmuch as the Court has concluded that plaintiff is entitled to the entry of summary judgment in this case, defendant's motion for summary judgment must be denied. An appropriate Order will be entered by the Court granting plaintiff's cross motion for summary judgment, denying defendant's motion for summary judgment and entering judgment in favor of the plaintiff in the amount claimed.
Plaintiff is entitled to recover from defendant principal in the amount of $2,829.14, interest through April 21, 1999 in the amount of $2,199.72, a penalty of $6.75, prejudgment interest from April 21, 1999 to date at the rate of 7% per annum, and costs.