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Valentino v. United States Dep't of Education

September 16, 2009


The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge


Defendants U.S. Department of Education and Secretary Arne Duncan (collectively the "Secretary" or "Federal Defendants") move to dismiss all claims asserted in Plaintiff Maria E. Valentino's First Amended Complaint ("FAC") for lack of subject matter jurisdiction under Rule 12(b)(1) or, alternatively, to transfer the action to the U.S. Court of Claims under Rule 12(b)(3). Plaintiff, represented by pro bono counsel, opposes the motions. Pursuant to Local Rule 7.1(d)(1), this matter is appropriate for decision without oral argument. For the reasons set forth below, the motion to dismiss the action for lack of subject matter jurisdiction is granted. The court also grants Plaintiff 15 days leave to amend from the date of entry of this order to file a Second Amended Complaint.


The operative First Amended Complaint ("FAC"), filed on January 13, 2009, alleges four claims for breach of contract, accounting, declaratory relief, and temporary injunction. In or around February 1989 Plaintiff entered into two different loan agreements. Both loans, one for $4,000 and the other for $2,6850, were funded by Chemical Bank. (FAC ¶7). Upon graduation in June 1990, Plaintiff commenced repaying the loan. (FAC ¶8). She then obtained several deferments and resumed payments on both loans in February 1995. Id.

Shortly after Plaintiff resumed her scheduled payments, Plaintiff received delinquency notices from Chemical Bank indicating that she allegedly failed to make the required payments. (SAC ¶9). Plaintiff contacted Chemical Bank and was informed by a customer service representative that the matter would be investigated and that she would be provided with an accounting. When Chemical Bank failed to investigate her claims and to provide an accounting, Plaintiff attempted to contact someone at the bank by leaving voice mail messages which were never returned. (FAC ¶10). Plaintiff did not make her August 1995 payment. Id.

On August 25, 1995 Plaintiff received a notice from the Colorado Student Loan Program ("CSLP") informing Plaintiff that she was delinquent on one of her loans. She spoke with a CSLP representative and was informed that the matter would be investigated and someone would get back to her. (FAC ¶11). Plaintiff did not hear back from CSLP and she did not make her September 1995 payment. Over the next two years Plaintiff had "numerous telephone conversations with various representatives from CSLP and other collection agencies assigned to collect on the loans." (FAC ¶13). "[N]othing was ever done to investigate Plaintiff's claims and no accounting of the payment history for the loans in question was ever provided." Id.

From 1998 through about August 2004 Plaintiff allegedly made continued attempts to resolve outstanding issues concerning her student loans. (FAC ¶¶14-17). In August 2004, Plaintiff's counsel at that time contacted Pioneer Credit Recovery, the collection agency then attempting to collect on the loans. (FAC ¶17). Plaintiff alleges that she reached an agreement with Pioneer Credit Recovery to enter into a repayment program whereby all accrued interest and penalties were waived and permitting her to pay $100 per month on the outstanding balance. (FAC ¶18). Plaintiff alleges that she never received the promised written agreement from Pioneer Credit Recovery. Id.

Recently, Plaintiff alleges that "Defendants have effected a wage garnishment at Plaintiff's place of employment." (FAC ¶19). Plaintiff has allegedly attempted to contact Federal Defendants on numerous occasions to obtain an accounting. Id. Defendants have not responded to those requests. Id.

On October 11, 2008 Federal Defendants provided Plaintiff with a Notice of Propose Wage Garnishment. (Faatalale Decl. ¶25). On December 2, 2009 Plaintiff's counsel responded to the notice and requested a hearing. (Id. ¶¶26, 27). On the same date, Plaintiff spoke with representatives of the Federal Defendants and was informed about the timetable for receiving information about prior payments. (Id. ¶27, 28).

On December 11, 2008 the Secretary received a request from Plaintiff for a telephonic hearing. On or about January 5, 2009 Plaintiff submitted documentation to ED's Federal Student Aid personnel. (Id. ¶34). Federal Defendants represent that Plaintiff will obtain an administrative hearing within 60days of the December 8, 2008 request for a hearing. (Fataalale Decl. ¶33).

On January 16, 2009, Plaintiff moved for a temporary restraining order ("TRO") to enjoin the United States from garnishing a portion of her wages. On February 13, 2009 the parties jointly moved to dismiss the motion for a TRO as moot because the parties resolved the issues of wage garnishment.


The Rule 12(b)(1) Motion

The United States moves to dismiss the complaint for lack of subject matter jurisdiction pursuant to Rule 12(b)(1). The parties are in agreement that, to the extent subject matter jurisdiction exists in the present case, such jurisdiction arises under the Little Tucker Act, 28 U.S.C. ...

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