Holguin v. Nat'l Collegiate Student Loan Trust 2006-2 (In re Holguin)

609 B.R. 878

IN RE: Marie J. HOLGUIN, Debtor.

Marie J. Holguin, Plaintiff,

v.National Collegiate Student Loan Trust 2006-2, a Delaware Statutory Trust, Defendant.

No. 15-11410-j7

Adversary No. 18-1042 J

United States Bankruptcy Court, D. New Mexico.

Signed December 17, 2019

R Trey Arvizu, III, Las Cruces, NM, for Plaintiff.

Monette Cope, Weltman Weinberg & Reis, Chicago, IL, Andrew Paul Yarrington, Rose L. Brand & Associates, PC, Albuquerque, NM, for Defendant.

MEMORANDUM OPINION

ROBERT H. JACOBVITZ, United States Bankruptcy Judge Defendant National Collegiate Student Loan Trust 2006-2, a Delaware Statutory Trust ("NCSLT") filed a motion for summary judgment determining that the debt at issue in this adversary proceeding is a non-dischargeable "educational loan" made under a "program funded ... in part by ... a nonprofit institution." 11 U.S.C. § 523(a)(8)(A)(i).¹ The Motion for Summary Judgment includes a request to establish facts in this adversary proceeding pursuant to Fed. R. Civ. P. 56(g)² if the Court does not grant NCSLT's request for summary judgment. Plaintiff Marie J. Holguin contends that genuine issues of material fact concerning whether NCSLT is entitled to enforce the loan and whether the loan was made as part of a program funded by a nonprofit institution preclude summary judgment. See Response to Second Amended Motion for Summary Judgment ("Response") – Docket No. 35. NCSLT did not file a reply brief, or seek permission from the Court to offer any additional evidence in support of its Motion for summary Judgment in an effort to address any of the potential evidentiary problems raised in the Response.

After carefully reviewing the evidence submitted in support of the Motion for Summary Judgment and the Plaintiff's Response, the Court finds and concludes that genuine issues of material fact preclude summary judgment. Some of the requested material facts are not subject to genuine dispute and can be established for all purposes in this adversary proceeding. Accordingly, the Court will deny NCSLT's request for summary judgment and grant, in part, NCSLT's request to establish certain facts pursuant to Fed. R. Civ. P. 56(g). Consistent with Fed. R. Civ. P. 56(e)(1), the Court will give NCSLT an opportunity to support or address the remaining fact issues in an effort to avoid the expense of a trial.

SUMMARY JUDGMENT STANDARDS

A. Rule 56(a)

Summary judgment can streamline litigation and avoid the unnecessary expense of proceeding to trial. See Farnell v. Albuquerque Publ'g Co., 589 F.2d 497, 502 (10th Cir. 1978) ("[S]ummary judgment is a useful tool which may avoid needless trials."); Mitchell v. Zia Park, LLC, 842 F. Supp.2d 1316, 1321 (D.N.M. 2012) ("Principal purposes of summary judgment include streamlining litigation and saving needless time and expense by isolating and disposing of purely legal issues and factually unsupported claims and defenses.") (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S. Ct. 2548, 91 L. Ed.2d 265 (1986) ). The Court will grant summary judgment when the movant demonstrates that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a), made applicable to adversary proceedings by Fed.R.Bankr.P. 7056.

"[A] party seeking summary judgment always bears the initial responsibility of informing the ... court of the basis for its motion, and ... [must] demonstrate the absence of a genuine issue of material fact." Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548. Only if the properly supported material facts entitle the requesting party to judgment as a matter of law is it appropriate for the Court to grant summary judgment. Id. The Court evaluates a request for summary judgment by drawing "all reasonable factual inferences in favor of the non-moving party." Genberg v. Porter, 882 F.3d 1249, 1253 (10th Cir. 2018). Thus, summary judgment is appropriate "if the evidence points only one way and no reasonable inferences could support the non-moving party's position." Id. (citing Auraria Student Housing at the Regency v. Campus Village Apartments , 843 F.3d 1225, 1247 (10th Cir. 2016) ).

In opposing a motion for summary judgment, a party may establish the existence of a genuinely disputed material fact by: 1) citing to "depositions, documents, electronically stored information, affidavits or declarations, stipulations ... admissions, interrogatory answers or other materials" in the record; or 2) "showing that the materials cited [by the moving party] do not establish the absence ... of a genuine dispute," or that the moving party "cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1)(A) and (B). A dispute is "genuine" where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is "material" if it "might affect the outcome of the suit under the governing law[.]" Id.

B. Rule 56(g)

The Motion for Summary Judgment includes a request to treat facts as established in this adversary proceeding pursuant to Fed. R. Civ. P. 56(g), which provides:

If the court does not grant all the relief requested by the motion, it may enter an order stating any material fact—including an item of damages or other relief—that is not genuinely in dispute and treating the fact as established in the case.

Fed. R. Civ. P. 56(g), made applicable to adversary proceedings by Fed. R. Bankr. P. 7056.

Whether to grant a request to establish facts falls within the Court's sound discretion. Id. (providing that the court "may" enter an order establishing facts); See 10B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2737 (4th ed.) ("The question whether to exercise [its] authority [to establish undisputed material facts under Rule 56(g) ] is within the court's discretion.").³

FACTS NOT SUBJECT TO GENUINE DISPUTE

1. Plaintiff entered into a Non-Negotiable Credit Agreement ("Loan Agreement") with GMAC Bank to attend New Mexico State University ("NMSU") for the academic period of August 25, 2005 – May 2006. See Statement of Undisputed Material Facts ("UMF"), No. 1; Affidavit of Bradley Luke ("Luke Affidavit"), ¶¶ 10 and 11; Complaint, Exhibit A. 2. The Loan Agreement was accompanied by a Note Disclosure Statement. See Complaint, Exhibit A, p. 2.

3. Plaintiff applied for the Loan Agreement by facsimile, and the signature page for the Loan was returned by facsimile. See UMF, No. 6; Response, ¶ 6.

4. Plaintiff signed the Loan Agreement on July 27, 2005. Complaint, Exhibit A; UMF, No. 9; Response ¶ 9; Luke Affidavit, ¶ 10.

5. GMAC Bank made a loan ("Loan") to Plaintiff under the Loan Agreement. UMF, No. 12 ("Plaintiff did not return any of the funds."); Response, ¶ 12.

6. The Loan was made under the GMAC Bank Undergraduate Loan Program ("Loan Program"), a part of the GMAC Alternative Loan Program. UMF, No. 2; Response, ¶ 2; Complaint, Exhibit A.

7. The Loan is an educational loan. UMF, No. 3; Response, ¶ 3.

8. The principal amount of the Loan was $27,520.00. See UMF, No. 1; Response, ¶ 1; Luke Affidavit, ¶ 11; Complaint, Exhibit A.

9. The Loan proceeds were disbursed on or about August 2, 2005. See Complaint, Exhibit A; Luke Affidavit, ¶ 11.

10. The Loan Agreement includes the following provisions:

a. "The proceeds of this loan will be used only for educational expenses at the School."

b. "I acknowledge that the requested loan is subject to the limitations on dischargeability in bankruptcy contained in Section 523(a)(8) of the United States Bankruptcy Code. Specifically, I understand that you have purchased a guaranty of this loan, and that this loan is guaranteed by The Education Resources Institute, Inc. (‘TERI’), a non-profit institution."

c. "I understand that I am responsible for repaying immediately any funds that I receive which are not to be used or are not used for educational expenses related to attendance at the School for the academic period states."

d. "by my signature I certify that I have read, understand and agree to the terms of and undertake the obligations set forth on all four (4) pages of this Loan Request/Credit Agreement."

Loan Agreement, ¶¶ 3, L.2, L.12, N and signature page; Luke Affidavit, Exhibit A-1; UMF, Nos. 8, 10, and 11; Response, ¶¶ 8, 10, and 11.

11. Plaintiff did not return any of the funds disbursed under the Loan. UMF, No. 12; Response, ¶ 12.

12. The Educational Resources Institute, Inc. ("TERI") is a nonprofit institution. UMF, No. 5; Response, ¶ 5.

13. TERI and GMAC Bank entered into a Guaranty Agreement dated May 30, 2003 ("Guaranty Agreement"). See Luke Affidavit – Exhibit B.⁴

14. The Guaranty Agreement defines the "Program" as the "GMAC Bank Student Loan Program as more fully described in the Program Guidelines." Guaranty Agreement, ¶ 1.8.

15. Under the Guaranty Agreement, TERI guaranteed to GMAC Bank "the payment of 100% of the principal of and accrued interest on every Loan as to which a Guaranty Event has occurred," conditioned upon certain requirements. See Guaranty Agreement, Section 2.

16. The Guaranty Agreement has a stated term ending July 31, 2004, which "may be renewed by mutual agreement of the parties ... prior to the end of the then-current term." Guaranty Agreement, Section 7.1.

17. On June 8, 2006, GMAC Bank, The First Marblehead Corporation, and National Collegiate Funding ("NCF") entered into a 2006-2 Pool Supplement GMAC Bank ("Pool Supplement"). See Luke Affidavit, Exhibit C.⁵

18. Under the Pool Supplement, GMAG bank sold certain loans to NCF together with GMAC Bank's rights under the Guaranty Agreement with TERI. See Pool Supplement, Article 1.

19. On June 8, 2006, Wilmington Trust Company, NCF and TERI entered into a Trust Agreement. See Luke Affidavit, Exhibit E.⁶

20. Schedule D of the Trust Agreement identifies the Guaranty Agreement between TERI and "GMAC Bank, dated May 30, 2003, for loans...