Roth v. U.S. Dep't of Educ. (In re Roth)

638 B.R. 754

IN RE: Matthew Richard ROTH, Debtor.

Matthew Richard Roth, Plaintiff,

v.United States Department of Education, Defendant.

Case No. 17-04109-JJG-7

Adv. Pro. No. 20-50056

United States Bankruptcy Court, S.D. Indiana, Indianapolis Division, INDIANAPOLIS DIVISION.

Signed April 27, 2022

Michael J. Norris, Mike Norris & Associates, P.C., Indianapolis, IN, for Plaintiff.

Rachana Fischer, Office of U.S. Attorney, Indianapolis, IN, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

Jeffrey J. Graham, United States Bankruptcy Judge

This matter comes before the Court on Defendant the United States Department of Education's ("DOE") Motion for Summary Judgment (the "Motion") on Plaintiff Matthew Richard Roth's ("Debtor") Complaint Regarding Dischargeability of Federal Student Loans (the "Complaint"). For the reasons stated below, the Court GRANTS the Motion.

Undisputed Facts

1. After graduating from North Central High School in the top 15% of his class, Debtor matriculated to Butler University ("Butler") in Indianapolis, Indiana.

2. Debtor enrolled as a full-time student in Butler's pharmacy program. Students seeking a pharmacy degree at Butler must first complete two years of pre-pharmacy courses. If they earn at least a 3.0 grade

point average ("GPA") in this coursework, they automatically advance to the four-year pharmacy program (the "Pharmacy Program"), which consists of three years of additional coursework and one year of clinical rotations. This auto-advancement feature is unique to Butler; other schools require student to compete for admission to the school's pharmacy program.

3. Debtor attended Butler from the Fall of 2009 to June of 2016.

4. Despite struggling in a couple of pre-pharmacy classes, Debtor's GPA was sufficient to auto-advance into the Pharmacy Program.

5. Once in the Pharmacy Program, Debtor was expected to maintain at least a 2.0 GPA.

6. During his enrollment at Butler, Debtor repeated eight courses: Calculus, Human Anatomy, Human Physiology, Intro to Principles of Drug Action, Therapeutics 1, Therapeutics 1 Case Studies, Therapeutics 2, and Therapeutics 2 and Case Studies.¹ Debtor earned Fs in Therapeutics 1² and Therapeutics 2 and Case Studies, as well as an F in Pharmacy Practice Experience 3.

7. Debtor earned Ds in Organic Chemistry and Principles of Pathogenic Microbiology. He earned a D- in Cellular and Molecular Biology.

8. Because Debtor initially failed Therapeutics I, he was unable to advance to year three of the four-year pharmacy program. He was instead held back a year.

9. Plaintiff incurred additional student loans by having to repeat a year of the Pharmacy Program.

10. Debtor failed Therapeutics II and Case Studies after he missed the oral presentation. Debtor claims that he missed the oral presentation because an incorrect date was listed on the syllabus. By failing this course, Debtor would have been held back yet another year. But Debtor appealed and was allowed to retake the class and advance to his third year of studies.

11. Debtor claims that he failed Intro to Pharmacy Practice Experience 3 because the professor failed to communicate a project deadline.

12. On January 7, 2015, Butler informed Debtor by letter that he had been dismissed from the Pharmacy Program, as his failing grade in Pharmacy Practice Experience 3 meant that Debtor had not met the stipulations for remaining in the program.

13. Debtor continued to take classes at Butler while he appealed his dismissal from the Pharmacy Program. In the Spring of 2015, Debtor failed Pharmacy, Policy, and the Law. The professor for this class took issue with the fact that Debtor signed onto a group project without the group's express consent. The professor informed Debtor that he intended to refer the matter to Butler's academic affairs committee.

14. Debtor also took non-pharmacy classes in the Fall of 2015 and Spring of 2016. Although he did not meet all of the requirements, Butler allowed Debtor to graduate with a degree in Marketing from the Lacy School of Business.

15. Butler denied Debtor's multiple requests to be readmitted to the Pharmacy Program.

16. After leaving Butler, Debtor initially struggled to find work and lived with his father in Section 8 housing.

17. Debtor eventually took a position with CVS as a pharmacy technician in June of 2016. He also worked at CVS as a cashier.

18. In November of 2017, Debtor began working as a full-time computer technician at the American College of Education ("ACE"). He remains in that position and currently earns $49,000 a year at ACE. Debtor's income from ACE has increased every year in the time that he has worked there.

19. Debtor was terminated by CVS in July of 2020 for violating the company's cell phone social media policy. After his termination, Debtor took a part-time position with Walmart as a pharmacy technician. A recent Walmart paystub shows that he earns approximately $728.81 every two weeks from Walmart. Debtor asserts, however, that his salary at Walmart is not guaranteed as his hours often fluctuate. Debtor has also indicated a desire to eventually quit this job.

20. In 2017, Debtor earned $34,660, in 2018, he earned $47,818 and in 2019, he earned $51,560. His income increased further in 2020, although an exact figure has not been provided.

21. Debtor is not married and has no children.

22. Debtor has no disability.

23. As of June 19, 2020, Debtor owed the DOE $112,138.59 in principal and $16,409.14 in interest, for a total indebtedness of $128,747.73 (the "Federal Loans"). The Federal Loans are currently "frozen" and have not accrued interest or fees since November of 2017.

24. Debtor has not made any payments on the Federal Loans and has not applied for any income-based repayment plan.

25. Based on the income he earns at ACE, but excluding his income from Walmart, if Debtor were to apply for such a program, it is estimated that he would pay $373.00 a month. If he consolidated the Federal Loans and applied for the REPAYE program through the DOE, it is estimated that he would owe approximately $247.00 a month. Presumably, if his Walmart income was included, his monthly payment under either of these programs would be higher.

26. In the absence of a repayment program, Debtor's monthly student loan payment is approximately $1,403 per month if paid over 10 years and approximately $800 if paid over 25 years.

27. In May of 2018, Debtor initiated an adversary proceeding to discharge certain private student loans (the "Private Loan Litigation") in which he was eventually able to reduce approximately $80,000 of indebtedness to $10,000 to be paid over 15 years. He now pays only $55 per month on the remaining indebtedness.

28. The Private Loan Litigation came at a price in that Debtor incurred $42,500 in associated legal fees. During and after the Private Loan Litigation, Debtor has made significant payments to his now former attorney to pay off these fees. He also took out several short-term unsecured loans to pay the fees—debt that he continues to pay on a monthly basis.

29. He has incurred an additional $19,000 in legal fees associated with the present adversary proceeding.

30. Per Debtor's budget, he currently spends $818 per month on expenses related to his legal fees. At times, he has spent over $1,000 a month on these fees. At his deposition in June of 2021, Debtor indicated that he was not paying toward the Federal Loans because he was, instead, paying his attorney.

31. Debtor spends at least some of his income dining out at steakhouses. For instance, in 2019, he spent approximately $1,100 on these meals.

32. Starting in May of 2020, Debtor began spending a significant amount of his income on gun-related expenses. He apparently used COVID-related stimulus funds on these expenses in the wake of "riots" following the death of George Floyd.

Conclusions of Law

Summary Judgment Standard

Summary judgment is appropriate if the pleadings and affidavits on file show there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). At the summary judgment stage, the court's role is not to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial—"whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual dispute is "genuine" only if there is sufficient evidence for a reasonable fact-finder to find in favor of the nonmoving party. Id. at 248, 106 S.Ct. 2505. For a fact to be material, it must be "outcome determinative under governing law." Contreras v. City of Chicago , 119 F.3d 1286, 1291-92 (7th Cir. 1997).

The moving party bears the burden of establishing that there is no genuine issue about any material fact and that the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In determining whether there is a genuine issue of material fact, the Court must view the evidence and draw all reasonable inferences in the light most favorable to the non-moving party. E.E.O.C. v. Sears, Roebuck & Co. , 233 F.3d 432, 436-37 (7th Cir. 2000). While the Court views the record in the light most favorable to the non-moving party, the non-moving party must still point to specific evidence that would be admissible at trial, which "could support judgment in [non-movant's] favor ...." Marr v. Bank of Am., N.A. , 662 F.3d 963, 966 (7th Cir. 2011).

The Court notes that it struck Debtor's initial response brief, certain of his designated evidence, and his supporting affidavit because they wholly failed to comply with applicable national and local rules and/or contained inadmissible evidence. Debtor was given an opportunity to file a new supporting brief but was cautioned...