Filed: Apr. 11, 2016
Latest Update: Apr. 11, 2016
Summary: NOT FOR PUBLICATION STATE OF UNCONTROVERTED FACTS AND CONCLUSIONS OF LAW ROBERT KWAN , Bankruptcy Judge . Having reviewed the motion of Plaintiff, The Attorney General of Canada on behalf of Her Majesty The Queen as Represented by the Minister of National Revenue, a Canadian governmental entity ("Plaintiff", "Her Majesty", or "the Crown") 1 for summary judgment (Docket No. 11), the opposition of Defendant Susan J. Mulley, Debtor, thereto (Docket No. 15), Plaintiff's Amended Proposed Stat
Summary: NOT FOR PUBLICATION STATE OF UNCONTROVERTED FACTS AND CONCLUSIONS OF LAW ROBERT KWAN , Bankruptcy Judge . Having reviewed the motion of Plaintiff, The Attorney General of Canada on behalf of Her Majesty The Queen as Represented by the Minister of National Revenue, a Canadian governmental entity ("Plaintiff", "Her Majesty", or "the Crown") 1 for summary judgment (Docket No. 11), the opposition of Defendant Susan J. Mulley, Debtor, thereto (Docket No. 15), Plaintiff's Amended Proposed State..
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NOT FOR PUBLICATION
STATE OF UNCONTROVERTED FACTS AND CONCLUSIONS OF LAW
ROBERT KWAN, Bankruptcy Judge.
Having reviewed the motion of Plaintiff, The Attorney General of Canada on behalf of Her Majesty The Queen as Represented by the Minister of National Revenue, a Canadian governmental entity ("Plaintiff", "Her Majesty", or "the Crown")1 for summary judgment (Docket No. 11), the opposition of Defendant Susan J. Mulley, Debtor, thereto (Docket No. 15), Plaintiff's Amended Proposed Statement of Uncontroverted Facts and Conclusions of Law (Docket No. 21) and Defendant's Response thereto (Docket No. 22), the other papers and pleadings in this adversary proceeding, the court hereby adopts the following statement of uncontroverted facts and conclusions of law:
I. STATEMENT OF UNCONTROVERTED FACTS
UNDISPUTED MATERIAL FACTS SUPPORTING EVIDENCE
Plaintiff's Amended Proposed Statement
1. The underlying Complaint concerns of Uncontroverted Facts and
Canada Guaranteed student loans made Conclusions of Law, Fact No. 1 (Docket
pursuant to the Canada Student Loans No. 21); Defendant's Response to
Act, R.S.C. 1985, c. S-23, as amended Plaintiff's Amended Statement of
(hereinafter "CSLA"), and its Regulations, Uncontroverted Facts and Conclusions
as amended (hereinafter "CSLRs"). of Law, ¶ 1 (Docket No. 22) ("Defendant
does not dispute the recitation of facts
set forth in Plaintiff's [Amended]
Statement of Uncontroverted Facts and
Conclusions of Law. . . ."); Complaint for
Nondischargeability of Debt Pursuant to
11 U.S.C. § 523(a)(8) (hereinafter
"Complaint") as ¶ 4 (Docket No. 1);
Defendant's Answer to Complaint
Objecting to Dischargeability of Debt
523(a)(8) (hereinafter "Answer") at ¶ 1,
(Docket No. 6); Declaration of Jennifer
Lee Trottier in Support of Default
Judgment (hereinafter "Declaration of
Trottier") at ¶ 1, attached thereto as
Exhibit 3 to Plaintiff's Statement of
Undisputed Facts (Docket No. 14).
Plaintiff's Amended Proposed Statement
2. Defendant Susan J. Mulley, Debtor of Uncontroverted Facts and
(hereinafter "Defendant") entered into a Conclusions of Law, Fact No. 2;
series of Guaranteed Canada student loan Defendant's Response to Plaintiff's
agreements with the Canadian Imperial Amended Statement of Uncontroverted
Bank of Commerce (hereinafter the Facts and Conclusions of Law, ¶ 1;
"Lender") under which the Lender Complaint at ¶ 5 and Exhibit A attached
disbursed to Defendant student loans thereto; Answer at ¶ 1.
totaling CAD (Canadian Dollars) 56,140.
True and correct copies of these
Guaranteed Canada student loan
agreements are attached as Exhibit A to
Complaint.
Plaintiff's Amended Proposed Statement
3. After Defendant ceased to be a full time of Uncontroverted Facts and
student, she became liable to pay interest Conclusions of Law, Fact No. 3;
accruing on the Guaranteed Canada Defendant's Response to Plaintiff's
student loans. Amended Statement of Uncontroverted
Facts and Conclusions of Law, ¶ 1;
Complaint at ¶ 6; Answer at ¶ 1.
Plaintiff's Amended Proposed Statement
4. As Defendant opted to not pay, or failed of Uncontroverted Facts and
to pay, the interest accrued in this period, Conclusions of Law, Fact No. 4;
it was added to and became part of the Defendant's Response to Plaintiff's
principal amount of the Guaranteed Amended Statement of Uncontroverted
Canada student loans. Facts and Conclusions of Law, ¶ 1;
Complaint at ¶ 7; Answer at ¶ 1.
Plaintiff's Amended Proposed Statement
5. The Lender prepared a student loan of Uncontroverted Facts and
consolidation agreement form (hereinafter Conclusions of Law, Fact No. 5;
a "Consolidation Agreement") in Defendant's Response to Plaintiff's
anticipation of Defendant complying with Amended Statement of Uncontroverted
the requirement to consolidate all loans Facts and Conclusions of Law, ¶ 1;
within six months of ceasing to be a Complaint at ¶ 8 and Exhibit B attached
Full-time student. The Consolidation thereto; Declaration of Trottier at ¶ 9.
Agreement is a document prepared by the
Lender in the ordinary course of business
with respect to Guaranteed Canada
student loans which consolidated all
Guaranteed Canada student loan
agreements made to a borrower and sets
out the terms and conditions for
repayment of the consolidated loans. In
breach of section 7 of the CSLRs,
Defendant failed to enter into the
Consolidation Agreement with the Lender.
Pursuant to subsection 9(1) of the CSLRs,
Defendant failed to enter into the
Consolidation Agreement with the Lender.
Pursuant to subsection 9(1) of the CSLRs
and the terms of each Guaranteed
Canada student loan agreement, the
principal amount of the Guaranteed
Canada student loans and interest
accrued thereon became due and payable
on the first day of the seventh month after
the month in which the Defendant ceased
to be a full-time student.
Plaintiff's Amended Proposed Statement
6. Because Defendant did not enter into a of Uncontroverted Facts and
Consolidation Agreement, the Lender sent Conclusions of Law, Fact No. 6;
a formal demand by certified mail to the Defendant's Response to Plaintiff's
Defendant for payment in full of her Amended Statement of Uncontroverted
Federal [Canadian Guaranteed] Student Facts and Conclusions of Law, ¶ 1;
loans in the amount of CAD 65,328.70, Complaint at ¶ 9; Declaration of Trottier
plus interest at the rate of prime plus 2.5% at ¶ 10.
from November 1, 2004.
Plaintiff's Amended Proposed Statement
7. Defendant failed to maintain payments of Uncontroverted Facts and
and comply with the formal demand sent Conclusions of Law, Fact No. 7;
by Lender, thus causing Lender to sustain Defendant's Response to Plaintiff's
a loss. Therefore, Lender submitted a Amended Statement of Uncontroverted
Claim for Loss (Schedule 6) to Human Facts and Conclusions of Law, ¶ 1;
Resources and Skills Development Complaint at ¶ 10; Declaration of Trottier
Canada (previously Social Development at ¶ 11.
Canada and Human Resources and Social
Development Canada) dated April 14,
2005, with respect to the Guaranteed
student loans disbursed to Defendant. On
or about May 12, 2005, the Crown paid the
Lender the sum of $51,680.91, which
consisted of the principal amount of
$49,885.41, plus interest in the sum of
$1,780.50 and costs of $15.00.
Plaintiff's Amended Proposed Statement
8. By virtue of the Crown's payment and of Uncontroverted Facts and
section 30 of the CSLRs, Her Majesty Conclusions of Law, Fact No. 8;
became subrogated in and to all the rights Defendant's Response to Plaintiff's
of the Lender in respect of the outstanding Amended Statement of Uncontroverted
Guaranteed Canada student loan referred Facts and Conclusions of Law, ¶ 1;
to herein. Accordingly, Defendant's Complaint at ¶ 11; Declaration of Trottier
outstanding Canada student loans at ¶ 12.
became a debt owing to the Crown.
Plaintiff's Amended Proposed Statement
9. Her Majesty tasked the Attorney of Uncontroverted Facts and
General of Canada with collecting the Conclusions of Law, Fact No. 9;
Defendant's unpaid guaranteed Student Defendant's Response to Plaintiff's
Loans. Amended Statement of Uncontroverted
Facts and Conclusions of Law, ¶ 1;
Complaint at ¶ 12; Answer at ¶ 1.
Plaintiff's Amended Proposed Statement
10. On or about January 23, 2008, of Uncontroverted Facts and
Judgment was entered by the Ontario, Conclusions of Law, Fact No. 10;
Canada, Superior Court of Justice in favor Defendant's Response to Plaintiff's
of the Attorney General of Canada and Amended Statement of Uncontroverted
against Defendant in the amount of CAD Facts and Conclusions of Law, ¶ 1;
62,577.89 and costs of CAD 1,411.00. Complaint at ¶ 13 and Exhibit C attached
thereto; Answer at ¶ 1.
Plaintiff's Amended Proposed Statement
11. The Attorney General of Canada of Uncontroverted Facts and
engaged the Law Offices of H. Michael Conclusions of Law, Fact No. 11;
Soroy to obtain a judgment enforceable Defendant's Response to Plaintiff's
against Defendant in the State of Amended Statement of Uncontroverted
California. Facts and Conclusions of Law, ¶ 1;
Complaint at ¶ 14; Answer at ¶ 1.
Plaintiff's Amended Proposed Statement
12. On September 2, 2010, the Law of Uncontroverted Facts and
Offices of H. Michael Soroy obtained a Conclusions of Law, Fact No. 12;
default judgment in the amount of United Defendant's Response to Plaintiff's
States Dollars (USD) 71,830.16 in the Amended Statement of Uncontroverted
Superior Court of California for the County Facts and Conclusions of Law, ¶ 1;
of Los Angeles, case number BC432993, Complaint at ¶ 15 and Exhibit D attached
against Defendant on behalf of Plaintiff, thereto; Answer at ¶ 1.
the Attorney General of Canada.
Plaintiff's Amended Proposed Statement
13. Defendant's wages were garnished of Uncontroverted Facts and
and the balance due has been reduced to Conclusions of Law, Fact No. 13;
USD 59,051.49. Defendant's Response to Plaintiff's
Amended Statement of Uncontroverted
Facts and Conclusions of Law, ¶ 1;
Complaint at ¶ 16; Answer at ¶ 1.
Plaintiff's Amended Proposed Statement
14. Defendant filed a voluntary petition for of Uncontroverted Facts and
relief under the provisions of Chapter 7 of Conclusions of Law, Fact No. 14;
the United States Bankruptcy Code, 11 Defendant's Response to Plaintiff's
U.S.C., on May 11, 2015, staying the Amended Statement of Uncontroverted
garnishment of Debtor's wages. Facts and Conclusions of Law, ¶ 1;
Complaint at ¶ 17; Answer at ¶ 1.
Plaintiff's Amended Proposed Statement
15. Defendant's only affirmative defenses of Uncontroverted Facts and
to Plaintiff's Complaint are failure to state Conclusions of Law, Fact No. 15;
a cause of action and that foreign student Defendant's Response to Plaintiff's
loans are outside the scope of Section Amended Statement of Uncontroverted
523(a)(8) of the United States Bankruptcy Facts and Conclusions of Law, ¶ 1;
Code, 11 U.S.C. Answer at ¶¶ 5-6.
II. CONCLUSIONS OF LAW
1. A motion for summary judgment should be granted if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Bankr. P. 7056; Fed. R. Civ. P. 56; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-248 (1986).
2. The moving party has the burden of showing that there is no genuine issue of material fact, and that it is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
3. Educational loans made, insured, or guaranteed by a governmental unit, including the loans which are the subject of this adversary proceeding, are not dischargeable unless Defendant affirmatively obtains a hardship determination. 11 U.S.C. § 523(a)(8)(A); see also, Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440, 450 (2004).
4. "Governmental unit" is defined within title 11 to include foreign states and other foreign governments, which includes the Government of Canada. 11 U.S.C. § 101(27).
5. The discharge of debts in this bankruptcy case does not discharge the Defendant's debts from the educational loans made, insured, or guaranteed by the Government of Canada, which are the subject of this adversary proceeding, since there is no evidence showing that Defendant has affirmatively obtained an undue hardship determination pursuant to 11 U.S.C. § 523(a)(8)(A).
6. Based on the above statement of uncontroverted facts, Plaintiff has met his burden of demonstrating as the party moving for summary judgment that there is no genuine issue of material fact, and based on these conclusions of law, Plaintiff has shown that he is entitled to judgment as a matter of law, and therefore, Plaintiff's motion for summary judgment should be granted.
7. A separate judgment determining that Defendant's student loan debts are not dischargeable at this time pursuant to 11 U.S.C. § 523(a)(8)(A) is being filed concurrently herewith.
