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United States v. Giles

United States District Court, E.D. Wisconsin

February 10, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
JEAN P. GILES, Defendant.

          DECISION AND ORDER

          LYNN ADELMAN District Judge.

         The United States of America brought suit against Jean Giles, alleging that she owes the U.S. Department of Education (DOE) more than $55,000 plus interest because of a student loan that she received in 1996 but never repaid. The government moves for summary judgment. In a prior order, I noted some potential evidentiary issues with the materials that the government initially filed in support of its motion and gave it an opportunity to submit additional materials. The government has done so, and the parties have submitted briefs addressing the admissibility of those materials. I will now consider the government’s motion on the merits.

         I. BACKGROUND

         Giles started college in 1978 and paid for her education in part by taking out student loans. After graduating, she returned to school part-time to pursue a master's degree. She made all required payments on her student loan debt until 1995 when, through an attorney, she filed a petition for relief under Chapter 7 of the Bankruptcy Code. In Schedule F of her petition (listing creditors holding unsecured nonpriority claims), she listed $30,488 owed to “Great Lakes Higher Ed.” for student loans. ECF No. 47-3, at 2. The bankruptcy court issued a discharge order on August 2, 1995, and Giles never again made a voluntary payment toward her student loan debt. The parties dispute whether Giles’s student loans were discharged.

         After her bankruptcy case ended, Giles started getting phone calls from Sallie Mae, a financial services company specializing in student loans, demanding payment on her student loan debt. She did not understand why Sallie Mae was calling given that her loans were with Great Lakes and she thought they had been discharged. She told Sallie Mae that the debt had been discharged and demanded that the calls stop. They didn’t. Giles was told that if she signed an application for a consolidation loan, the calls would stop. She signed in December 1995, and the calls stopped.

         Giles’s consolidation loan (for $33,178.87 at 7% interest annually) was disbursed by Sallie Mae on May 9, 1996. The loan was guaranteed by the Texas Guaranteed Student Loan Corporation and reinsured by DOE under the Federal Family Education Loan Program (FFELP), part of Title IV-B of the Higher Education Act of 1965, as amended, 20 U.S.C. §§ 1071 to 1087-4.

         Giles defaulted on October 18, 2005. The loan holder filed a claim on the loan guarantee, the guarantor paid the claim in the amount of $55,566.73, and the entire amount paid became due to the guarantor as principal. See 34 C.F.R. § 682.410(b)(4). The guarantor collected a total of $6,049 while it held the debt but was unable to collect the full amount due. On October 9, 2009, the guarantor assigned its right and title to the loan to DOE.

         On June 26, 2014, DOE referred the matter to the U.S. Attorney’s Office, which brought this suit. According to the government, Giles owes outstanding principal in the amount of $55,026.07 plus interest accruing at a rate of $10.55 per day.

         II. DISCUSSION

         A party is entitled to summary judgment if it shows that there is no genuine dispute as to any material fact and it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). To survive a motion for summary judgment, a non-moving party must show that sufficient evidence exists to allow a jury to return a verdict in its favor. Brummett v. Sinclair Broad. Grp., Inc., 414 F.3d 686, 692 (7th Cir. 2005). For the purposes of deciding the government’s motion, I resolve all factual disputes and make all reasonable factual inferences in favor of Giles, the non-moving party. Springer v. Durflinger, 518 F.3d 479, 483–84 (7th Cir. 2008).

         A. Evidentiary Issues

         Before proceeding to the merits, I will address the parties’ evidentiary issues. Originally, the government relied on a certificate of indebtedness executed by a DOE loan analyst and two declarations by Christian Odom, a DOE senior loan analyst, to establish numerous material facts, such as when Giles defaulted on her student loan obligation, when the original holder of the loan filed a claim seeking reimbursement from the loan guarantor, and when the guarantor assigned its right and title to the loan to DOE. Giles argued that these materials were not based on personal knowledge and that they contained inadmissible hearsay.

         I expressed concern about these materials because, as submitted, I could not determine whether they were admissible. They appeared to be based on DOE records, many of which the government did not provide. I also noted that the government had not sufficiently demonstrated that the records were admissible under the so-called business records exception to the general evidentiary prohibition on hearsay. Fed. R. Evid. 803(6). I gave the government an opportunity to properly support its motion with admissible evidence. I find that it has done so.

         The government submitted additional DOE records with a supplemental declaration from Odom, which shows that the records properly fall within the business records exception. Federal Rule of Evidence 803 states that the following are not excluded by the rule against hearsay:

(6) Records of a Regularly Conducted Activity. A record of an act, event, condition, ...

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