The opinion of the court was delivered by: Gregory G. Hollows United States Magistrate Judge
FINDINGS AND RECOMMENDATIONS; ORDER
Although the complaint does not so allege, the United States has brought an action pursuant to the Federal Debt Collections Procedures Act, 28 U.S.C. 3001, to collect on a long ago defaulted student loan. Apparently, defendant De Kellis, a practicing attorney, took out substantial student loans for law school and then sought a consolidation loan from Sallie Mae in November of 1992. The government contends that the consolidation loan was a federally guaranteed type of student loan. He received those monies which paid off his former student loans, started payment on the consolidated loan in April of 1993, and soon defaulted in August of 1994 (according to De Kellis). Bankruptcy proceedings under Chapter 7 commenced soon thereafter; DeKellis sought to discharge his then young student consolidation loan obligations, ostensibly, because of a failed business venture. Whether the consolidation loan could be discharged is a prime issue in this case.
The guarantee process worked very slowly, and it was not until 2006 that the loan repayment rights were assigned to the Department of Education, which had payed off the entirety of the loan. This action was not brought until mid-2009.
De Kellis believes that his consolidation loan was a "private loan" fully dischargeable in bankruptcy. Without specific explanation, he asserts that he sought a private consolidation loan from Sallie Mae (at a higher interest rate and with other non-beneficial terms) to "extricate myself from government sponsored programs. " Of course, if truly a private loan, this extrication would open the door for this debt to be discharged in bankruptcy.
The undersigned finds for purposes of DeKellis' motion to dismiss and the government's cross-motion for summary judgment, that no issue of fact exists to controvert the government's showing that the loan consolidation sought by DeKellis was a FFELP loan, not dischargeable in bankruptcy. The government student loan program weaves a web from which it is difficult to extricate oneself unless the loans are actually paid back. The government is entitled to summary judgment on all issues save for the actual computation of what remains due and owing.
1. Whether the loan at issue was part of the a guaranteed student loan provisions of federal law, and hence non-dischargeable;
2. Whether any subjective or other wise erroneous belief about the loan predicates can change the nature of the loan received;
3. Whether, in any event, a material issue of fact exists concerning the nature of the loan;
4. Whether the Espinosa Supreme Court decision precludes the government from seeking to recover on the loan;
5. The amount due and owing on the consolidated loan.
Legal Standard for Motion to Dismiss
In order to survive dismissal for failure to state a claim pursuant to Rule 12(b)(6), a complaint must contain more than a "formulaic recitation of the elements of a cause of action;" it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965 (2007). "The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action." Id., quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004). "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.
In considering a motion to dismiss, the court must accept as true the allegations of the complaint in question, Hospital Bldg. Co. v. Rex Hospital Trustees, 425 U.S. 738, 740, 96 S.Ct. 1848, 1850 (1976), construe the pleading in the light most favorable to the party opposing the motion and resolve all doubts in the pleader's favor. Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 1849, reh'g denied, 396 U.S. 869, 90 S.Ct. 35 (1969). The court will "'presume that general allegations embrace those specific facts that are necessary to support the claim.'" National Organization for Women, Inc. v. Scheidler, 510 U.S. 249, 256, 114 S.Ct. 798, 803 (1994), quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 2137 (1992). Moreover, pro se pleadings are held to a less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 596 (1972).
The court may consider facts established by exhibits attached to the complaint. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). The court may also consider facts which may be judicially noticed, Mullis v. United States Bankruptcy Ct., 828 F.2d 1385, 1388 (9th Cir. 1987); and matters of public record, including pleadings, orders, and other papers filed with the court, Mack v. South Bay Beer Distributors, 798 F.2d 1279, 1282 (9th Cir. 1986). The court need not accept legal conclusions "cast in the form of factual allegations." Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).
A pro se litigant is entitled to notice of the deficiencies in the complaint and an opportunity to amend, unless the complaint's deficiencies could not be cured by amendment. See Noll v. Carlson, 809 F. 2d 1446, 1448 (9th Cir. 1987).
Summary Judgment Standard Under Rule 56
Summary judgment is appropriate when it is demonstrated that there exists "no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c).
Under summary judgment practice, the moving party always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553 (1986) (quoting Fed. R. Civ. P. 56(c)).
Burdens on summary judgment motion differ depending on who will carry the burden of persuasion at trial. "As the party with the burden of persuasion at trial, the [moving party] must establish "beyond controversy every essential element of its' [ ] claim. [The non-moving party] can defeat summary judgment by demonstrating the evidence, taken as a whole, could lead a rational trier of fact to find in its favor." Southern California Gas Co. v. City ...