United States District Court, D. Vermont
MEMORANDUM AND ORDER (DOCS. 23, 27)
HONORABLE J. GARVAN MURTHA UNITED STATES DISTRICT JUDGE
Kayla Russo commenced this action in state court in October
2016. (Doc. 6.) The case was subsequently removed to this
Court based on diversity jurisdiction. (Doc. 1.) Defendants
Navient Solutions, LLC, SLM Private Credit Student Loan Trust
2006-A, SLM Private Credit Student Loan Trust 2010-C, SLM
Private Credit Student Loan Trust 2011-A, SLM Private Credit
Student Loan Trust 2011-B, and SLM Private Credit Student
Loan Trust 2015-A (collectively, Defendants) move to dismiss
the complaint. (Doc. 20.) The motion is fully briefed.
See Docs. 26, 31. Russo moves for leave to file a
second amended complaint. (Doc. 27.) Her motion is also fully
briefed. See Docs. 32, 33. For the reasons discussed
below, Plaintiff's motion is granted and Defendants'
motion is denied as moot.
defendant, SLM Private Credit Student Loan Trust, removed the
case to this Court (Doc. 1) and, while a motion to substitute
defendant (Doc. 9) was pending, Russo filed a motion to amend
her complaint (Doc. 17) resulting in the March 2017 first
Amended Complaint (Doc. 20) naming the current Defendants.
April 21, 2017, Defendants moved to dismiss the Amended
Complaint. (Doc. 23.) On June 9, 2017, Russo opposed the
motion to dismiss in a short filing (Doc. 26) and
simultaneously filed a motion for leave to amend her
complaint for a second time (Doc. 27). The proposed Second
Amended Complaint adds factual allegations and contains
specific counts of negligence, violation of the Vermont
Consumer Protection Act, negligent misrepresentation, and
invasion of privacy. (Doc. 27-1 (Proposed Second Amended
Solutions, LLC (“Navient”) was the servicer of
the loans issued by each loan trust and acted as their agent.
(Doc. 27-1 ¶¶ 6-7.) Between 2005 and 2009, Kathryn
Blank applied through Navient's website for four private
student loans for Plaintiff Russo that Navient
later bundled into the Loan Trust defendants. Id.
¶¶ 23-40. Russo did not apply for the last three
loans, Navient did not verify whether she was applying, and
she did not become aware of the extent of the loans until
after her graduation from college. Id. ¶¶
provides professional services by counseling or assisting
borrowers in the repayment of their loans. (Doc. 27-1
¶¶ 47-48.) Russo could not remain current on her
repayment obligations and, in August 2014, requested an
income based repayment plan. Id. ¶¶ 46,
49-51. Navient advised Russo forbearance of her loans was her
best option as they worked on a repayment plan, including her
request for an income based plan, and her loans were placed
in forbearance until October 2014. Id. ¶¶
49-50, 52-53. She alleges Navient's advice was false and
misleading because forbearance resulted in the addition of
unpaid interest to the principal of the loans which Navient
did not explain to her. Id. ¶¶ 55-57,
September 2014, Navient informed Russo it would not allow her
an income based repayment plan. (Doc. 27-1 ¶ 61.)
Navient again advised forbearance. Id. ¶ 63. In
December, Navient informed Russo she did not qualify for a
lower payment option and advised her best option was the
interest only repayment plan. Id. ¶ 64. In the
spring of 2015, when Russo stopped making payments, Navient
began contacting her every day--including while she was
working--up to seven times per day. Id. ¶¶
66-68. Navient's collection practices disrupted her
employment and damaged her reputation with her employer and
teaching peers. Id. ¶ 70. Navient ignored
Russo's oral request to contact her only after school
hours and not to call her employer and her October 2015
written request that she be contacted only in writing.
Id. ¶¶ 68, 71-72.
Standard of Review
Rule of Civil Procedure 15(a) allows a party to amend its
pleading with the court's leave and states the court
should freely give leave when justice so requires.
Fed.R.Civ.P. 15(a)(2). Where a motion to amend is opposed on
grounds of futility, the Court must determine whether the
amended complaint could withstand a motion to dismiss under
Federal Rule of Civil Procedure 12(b)(6). Balintulo v.
Ford Motor Co., 796 F.3d 160, 164-65 (2d Cir. 2015)
(citing Lucente v. Int'l Bus. Machines Corp.,
310 F.3d 243, 258 (2d Cir. 2002)).
Court will deny leave to amend if the proposed pleading fails
to set forth “sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (internal quotation marks and citation omitted). The
Court must draw inferences from the allegations in the light
most favorable to the plaintiff. Starr v. Georgeson
S'holder, Inc., 412 F.3d 103, 109 (2d Cir. 2005).
“A complaint should not be dismissed on the pleadings
unless it appears beyond doubt that the plaintiff can prove
no set of facts in support of his claim which would entitle
him to relief.” Cleveland v. Caplaw Enters.,
448 F.3d 518, 521 (2d Cir. 2006) (internal quotation marks
and citation omitted). The party opposing an amendment bears
the burden of demonstrating why leave to amend would be
futile. See Semper v. N.Y. Methodist Hosp., 786
F.Supp.2d 566, 582 (E.D.N.Y. 2011).
Motion to ...