Mansfield v. Swiger (In re Swiger)

1

IN RE: BRADLEY S. SWIGER, Debtor.

VICKY L. MANSFIELD, Plaintiff, v. BRADLEY S. SWIGER, and RONDA J. WINNECOUR, CHAPTER 13 TRUSTEE, Defendants.

BRADLEY S. SWIGER, Plaintiff, v. VICKY L. MANSFIELD, Defendant.

No. 18-24109-JAD

Adversary Nos. 19-02015-JAD, 19-02009-JAD

United States Bankruptcy Court, W.D. Pennsylvania

March 7, 2024

Chapter 13

Debtor Rodney D. Shepherd, Esq. Mary Bower Sheats, Esq. Ronda J Winnecour, Chapter 13 Trustee Office of the United States Trustee

MEMORANDUM OPINION, RELATED TO ECF NO. 1

Jeffery A. Deller United States Bankruptcy Judge

The matter before the Court is a consolidated adversary proceeding regarding the dischargeability of an alleged debt(s) due from Bradley S. Swiger (the "Debtor") to Ms. Vicky L. Mansfield (collectively, the "Parties"). The Debtor and Ms. Mansfield were formerly married. The gist of the action is that Ms. Mansfield contends that the Debtor fraudulently induced or caused Ms Mansfield to be an obligor on certain Parent PLUS student loans which funded the college education of one of their children. Given this alleged fraudulent conduct, Ms Mansfield contends that the debts due Ms. Mansfield from the Debtor on account of the same is excepted from discharge pursuant to 11 U.S.C. section 523(a)(2)(A).^[1]

I.

This Memorandum Opinion constitutes the Court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52, made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7052. For the reasons set forth below, the Court concludes that certain of the Parent PLUS loans were procured by the Debtor as a result of fraudulent representation, and therefore liability of the Debtor to Ms. Mansfield on account of the identified loans is determined to be non-dischargeable pursuant to 11 U.S.C. section 523(a)(2)(A).^[2]

II.

The Facts Adduced at Trial

On November 14, 2023, the Court conducted a trial on this matter, at which numerous exhibits were admitted into evidence. In addition, Ms Mansfield, the Debtor, Ms. Amanda Swiger (the Parties' adult daughter), and attorney Scott Kasbee (who was Mr. Swiger's divorce lawyer) testified.

The following facts were adduced at trial:

1. The Parties were married on March 7, 1993, and separated on September 1, 2014. Stipulation of the Parties ("Stipulation"), ECF No. 81 ¶2.

2. The Parties have two children, one of which is Amanda Swiger. Stipulation ¶2.

3. Amanda Swiger enrolled at Saint Francis University for the fall 2011 semester, and thereafter transferred to the Pennsylvania State University for the spring 2012 semester where she completed her college education.

4. In order to finance some of the expense of Amanda's college education, certain Parent PLUS loans (the "Loans") were obtained. The Loans form the basis of the debt at issue in this case.

5. The Loans were disbursed on October 10, 2011, January 15 2012, August 22, 2012, August 18, 2013, and August 18, 2014. Defendant's Proposed Exhibits (the "Mansfield Exhibits"), ECF No. 76, 25.^[3] See also Hr'g Tr. 23:6-10.

6. The Parties dispute exactly whom applied for the Loans and dispute the agreements between the Parties with respect to the same.

7. Ms. Mansfield avers that the agreement of the Parties was that the Loans were to be joint obligations of the Parties.

8. The Debtor testified that because Ms. Mansfield had put their older daughter's student loans in her (Ms. Mansfield's) name, the initial plan was for the loans for Amanda to be put in the Debtor's name. He denied that there was a discussion about putting Amanda's loans in both Parties' names. Hr'g Tr. 78:14-22. 9. Ms. Mansfield avers that it was the Debtor, and not her, who applied for the Loans, while the Debtor maintains it was Ms. Mansfield who applied for them.

10. Ms. Mansfield testified that she authorized the Debtor to sign her name to the Loans with the understanding that both Parties would be liable for them. Hr'g Tr. 21:14-18 & 133:2-8.

11. Ms. Mansfield stated that she relied on the Debtor's promise to apply for Amanda's student loans jointly in giving the Debtor verbal authority to sign her name to the Loan applications. Affidavit of Vicky Mansfield in Opposition to the Motion for Summary Judgment Filed by Bradley S. Swiger (the "Mansfield Affidavit") ¶¶6-7, included in the Mansfield Exhibits at 266-270.

12. Ms. Mansfield testified that responsibility for applying for the Loans was allocated to the Debtor because Ms. Mansfield had little understanding of the student loan process and it stressed her out, and because she considered her then-husband (the Debtor) to be more experienced and knowledgeable with respect to student loans. Hr'g Tr. 21-22 & 47:9-12.

13. The Debtor's educational and employment background is as follows. The Debtor graduated high school in 1985 and thereafter attended community college where he studied culinary arts. After working in food service, the Debtor attended Robert Morris University and graduated in 2001 with a Bachelor of Science degree in economics. The Debtor then obtained a Master's Degree and certification in education in 2003. At that point, the Debtor was employed in the education sphere as a substitute teacher and teacher's aide, before becoming an economics teacher. The Debtor sought additional certification from Duquesne University to become an administrator. In 2011, the Debtor began working on a doctoral program and earned his Doctorate in Education in 2014. Hr'g Tr. 100-103; Deposition Transcript 10-11, included in the Mansfield Exhibits at 282-358.

14. The Debtor applied for his own personal student loans in May of 2011. Hr'g Tr. 83:1-3.

15. Ms. Mansfield's educational and employment background is as follows. Ms. Mansfield obtained her GED at age 16 in 1987. Thereafter, she was generally employed as a nurse's aide. In 2000, Ms. Mansfield completed the registered nurse program at the Community College of Allegheny County and began working as a registered nurse. She remained in that employment as of the date of the trial. Prior to the COVID-19 pandemic, Ms. Mansfield began taking online courses to obtain a Bachelor's Degree in nursing. Although not expressly stated, it was inferred at trial that Ms. Mansfield did not complete this program. Hr'g Tr. 41-43.

16. Ms. Mansfield testified that she had virtually no experience with the student loan process, explaining that the applications for the student loans secured for her own education were primarily completed by her college's financial office and that she just "signed the papers." Hr'g Tr. 21:6-9 & 26-27. See also Hr'g Tr. 24:4-9 (stating that she "put in a PIN" for her student loan applications).

17. Ms. Mansfield stated that she was "severely, chronically ill" during the time Amanda's student loans were applied for and due to her illness, Ms. Mansfield authorized the Debtor to apply for Amanda's student loans "with the specific condition that the loans were to be made in our joint names, so that both of us would be jointly liable for the student loans." Mansfield Affidavit ¶5.

18. Ms. Mansfield testified that between 2011 and 2014, she experienced health issues including a bilateral equinus deformity in both feet, which inhibited her ability to walk; she was hospitalized with neurotoxicity; she had three abdominal surgeries, the last of which resulted in her being admitted to intensive care for one month; she experienced asthma issues; and experienced severe back pain. Hr'g Tr. 56-57.

19. According to the loan documents evidencing the Loan, Ms. Mansfield is the sole obligor on the Loans.

20. Introduced as an exhibit at trial is a Federal Direct PLUS Loan Application and Master Promissory Note dated October 1, 2011 (the "Master Promissory Note"). Mansfield Exhibits 56-65. The Master Promissory Note is in the name of Ms. Mansfield and identifies Amanda Swiger as the "Dependent Undergraduate Student." Master Promissory Note ¶¶ 5 & 14.

21. The Debtor denies that he applied for any of the Loans in Ms. Mansfield's name and asserts that he did not assist Ms. Mansfield in applying for the Loans. Hr'g Tr. 92-93.

22. Ms. Mansfield testified that the Loans were applied for by Amanda and the Debtor together. Hr'g Tr. 14:11-16.

23. Amanda Swiger testified that she remembered applying, together with the Debtor, for some of her personal student loans and some of the Parent PLUS Loans. Hr'g Tr. 61-66.^[4]

24. Amanda Swiger testified that she personally observed her father place Ms. Mansfield's name on the Loan applications on at least two occasions in the summers prior to her freshman and sophomore years (2011 and 2012). Hr'g Tr. 64-67.

25. Amanda Swiger testified that the Debtor told her that he was placing the Loans in Ms. Mansfield's name. Hr'g Tr. 68-69. The Debtor denies this, testifying that he told Amanda that Ms. Mansfield would have to apply for the Loans. Hr'g Tr. 88:13-18.

26. Amanda Swiger testified that she was able to differentiate between her personal student loans and the Loans at issue (which are Parent PLUS loans), because for her personal student loans she "went to a bank" and that her grandmother was the co-signer. Hr'g Tr. 65-66.

27. Amanda Swiger testified that the Debtor had access to the PIN used in the student loan application process that was kept in a filing cabinet next to the computer. Hr'g Tr. 68:16-23. 28. Amanda Swiger testified that the Debtor stated to her on at least two occasions-in the summers of 2011 and 2012-that he could not qualify to sign for her student loans. Hr'g Tr. 74:7-25.

29. The Debtor testified that he assisted Amanda with her Free Aplication for Federal Student Aid ("FAFSA"). Hr'g Tr. 78-79.

30. The Debtor testified that the parent portion of Amanda's FAFSA was completed when he "sat down with [Amanda]." Hr'g Tr.

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