United States District Court, D. Vermont
MEMORANDUM AND ORDER (DOCS. 64, 65)
J. GARVAN MURTHA, District Judge.
In November 2011, pro se plaintiff Leslie Kevin Kozaczek brought this action alleging various violations of the Fair Debt Collection Practices Act ("FDCPA") and Higher Education Act ("HEA"), violations of due process, negligence, and wrongful enforcement of a promissory note. New Hampshire Higher Education Assistance Foundation and Granite State Management Services (collectively, the "Defendants") have counterclaimed for payment under terms of the promissory note. (Doc. 35.) This case was stayed pending Kozaczek's bankruptcy case. See Doc. 74. Now before the Court is Kozaczek's motion for partial summary judgment (Doc. 64) and the Defendants' cross-motion for summary judgment (Doc. 65). For the reasons below, the Court DENIES Kozaczek's motion, and GRANTS the Defendants' motion.
The New Hampshire Higher Education Assistance Foundation ("NH Higher Ed"), a non-profit guaranty agency formed under the laws of New Hampshire, guaranteed Kozaczek's Federal Stafford student loan in 1990. (Doc. 65-1 ¶¶ 1, 8.) See N.H. Rev. Stat. Ann. § 195-E:1. NH Higher Ed administers a loan guarantee program under the HEA through an agreement with the United States Department of Education. Id . ¶ 4. Under New Hampshire law, NH Higher Ed is authorized to contract with a service corporation - here, Granite State Management & Resources ("Granite State") - "to provide bookkeeping, data processing, loan servicing, loan administration and related fiscal services required for the conduct of their business." N.H. Rev. Stat. Ann. § 195-E:14.
Kozaczek borrowed $3, 573 from the Granite Bank of Keene to attend Franklin Pierce College from 1990 to 1991. (Doc. 65-1 ¶ 6.) The loan went into default on July 22, 2008. Id . ¶ 9. Sallie Mae, to whom the loan had been transferred in 2000, submitted a default claim to NH Higher Ed in October 2008. Id . ¶ 10. On July 17, 2009, the Defendants contend Kozaczek was sent default notices which explained that NH Higher Ed could seek garnishment of his wages, file a lawsuit, offset his tax refunds, or take other actions in order to collect its money. Id . ¶ 11. In August 2009, NH Higher Ed was reinsured by the U.S. Department of Education for the amount paid upon default. Id . ¶ 12. Because of its fiduciary obligations to the Department of Education, NH Higher Ed assigned the claim to ConServe, a debt collection contractor (who was dismissed from this case as a defendant in July 2012, see Doc. 63) in January 2011. Id . ¶ 14.
After verifying Kozaczek's debt and sending a notice, ConServe sent his employer, Franklin Pierce University, an order to garnish up to fifteen percent of Kozaczek's wages. (Doc. 65-1 ¶¶ 17-19.) Franklin Pierce then garnished fifteen percent of Kozaczek's disposable earnings. Id . ¶ 20. According to NH Higher Ed, it never received from Kozaczek a request for a hearing or an exemption. Id . ¶ 21. NH Higher Ed also initiated proceedings to offset Kozaczek's income tax refunds, but the process was stopped due to this lawsuit. Id . ¶¶ 22-24.
A. Standard of Review
Under Federal Rule of Civil Procedure 56(a), a court must "grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "[T]he district court must draw all factual inferences in favor of, and take all factual assertions in the light most favorable to, the party opposing summary judgment." Coollick v. Hughes , 699 F.3d 211, 219 (2d Cir. 2012). The moving party "always bears the initial responsibility of informing the district court of the basis for its motion, " Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986), but "[w]here the moving party meets that burden, the opposing party must come forward with specific evidence demonstrating the existence of a genuine dispute of material fact." FDIC v. Great Am. Ins. Co. , 607 F.3d 288, 292 (2d Cir. 2010). "Where both parties have moved for summary judgment, the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.'" Murray v. Int'l Bus. Machs. Corps. , 557 F.Supp.2d 444, 448 (D. Vt. 2008) (citing Schwabenbauer v. Bd. of Educ. of Olean , 667 F.2d 305, 314 (2d Cir. 1981)).
Furthermore, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Scott v. Harris , 550 U.S. 372, 380 (2007) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247-48 (1986)). In other words, "the non-moving party must do more than simply show that there is some metaphysical doubt as to the material facts... and may not rely on conclusory allegations or unsubstantiated speculation." FDIC , 607 F.3d at 292 (internal quotation marks and citations omitted). Summary judgment should therefore be granted "[w]here it is clear that no rational finder of fact could find in favor of the nonmoving party because the evidence to support its case is so slight.'" Id . (quoting Gallo v. Prudential Residential Servs., Ltd. P'ship , 22 F.3d 1219, 1224 (2d Cir. 1994)).
B. The Defendants' Summary Judgment Motion
1. Kozaczek's FDCPA Claims
First, Kozaczek alleges several violations of the FDCPA. See Doc. 21 at 2-6. The Defendants contend the FDCPA excludes them from the definition of "debt collector." Under 15 U.S.C. § 1692a(6)(F), the FDCPA excludes "any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity... is incidental to a bona fide fiduciary obligation...." As mentioned above, NH Higher Ed is a non-profit guaranty agency, formed under the laws of New Hampshire that administers a loan guarantee program under the HEA through an ...